TN295 



No. 9101 



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Bureau of Mines Information Circuiar/1986 



Domestic Consumption Trends, 
1972-82, and Forecasts to 1993 
for 12 i\/lajor l\/letals 

By Staff, Bureau of Mines, U.S. Department of the Interior, 
and Basic Industries Sector, U.S. Department of Commerce 



UNITED STATES DEPARTMENT OF THE INTERIOR 



^{^^UXJ AJbJ ^ TLjumj f li^^^ 



Information Circular 9101 



Domestic Consumption Trends, 
1972-82, and Forecasts to 1993 
for 12 iVIajor IVIetais 

By Staff, Bureau of IVIines, U.S. Department of the Interior, 
and Basic industries Sector, U.S. Department of Commerce 




This report is based on a study 
conducted by the Bureau of Mines 
in cooperation with the — 

Basic Industries Sector, 
U.S. Department of Commerce 



IVIalcolm Baldrige 

Secretary of Commerce 



iVIichaei T. Kelley 

Deputy Assistant Secretary, 
Basic Industries 



UNITED STATES DEPARTMENT OF THE INTERIOR 
Donald Paul Model, Secretary 

BUREAU OF IVIINES 
Robert C. Morton, Director 



As the Nation's principal conservation agency, the Department of the Interior has 
responsibility for most of our nationally owned public lands and natural resources. This 
includes fostering the wisest use of our land and water resources, protecting our fish 
and wildlife, preserving the environment and cultural values of our national parks and 
historical places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to assure that 
their development is in the best interests of all our people. The Department also has 
a major responsibility for American Indian reservation communities and for people who 
live in island territories under U.S. administration. 



-r 














Library of Congress Cataloging-in-Publication Data 



Main entry under title: 

Domestic consumption trends, 1972-82, and forecasts to 1993 for 12 
major metals. 
(Information circular ; 9101) 



Supt. of Docs, no.: I 28.27: 9101 

1. Nonferrous metal industries— United States— Statistics. 2. Nonferrous metal 
industries— United States— Forecasting. I. United States, Bureau of Mines. II. United 
States. Dept. of Commerce. Basic Industries Sector. III. Series: Information circular (United 
States. Bureau of Mines) ; 9101. 

TN295.U4 [HD9539.A3U38] 622 s [338.8 '51 86-600154 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, DC 20402 



CONTENTS 



Page 

Abstract 1 

Acknowledgments 1 

Summary 2 

Analytical method 2 

Results 2 

Individual metal summaries 2 

Conclusions 6 

Introduction 6 

Analytical approach 7 

Interpretation of results 7 

Aluminum 8 

Metal cans (SIC 3411) 9 

Sheet metal work (SIC 3444) 9 

Electric and electronic equipment (SIC 3600) . . 10 
Motor vehicle bodies, parts, accessories (SIC 

3711, 3714) 10 

Transportation equipment (SIC 3700) 10 

Other 10 

Chromium 11 

Chemical industry (SIC 2800) 11 

Refractory industry (SIC 3297) 11 

Steel (SIC 3400, 3500, 3700, 9999) 11 

Cobalt 12 

Chemicals, paints, ceramics, and other 12 

Machinery and machine tools 12 

Electrical 13 

Transportation 13 

Copper 13 

Construction (SIC 1500, 1600, 1700) 14 

Air conditioning and heating equipment (SIC 

3585) 15 

Household appliances (SIC 3630) 15 

Motor vehicle parts and accessories (SIC 3710) 18 

Lead 16 

Batteries (SIC 3691) 16 

Gasoline additives (SIC 2869) 17 

General and heavy construction (SIC 1520, 

1540) 17 

Ammunition (SIC 3482) 17 

Pigments (SIC 2816) 17 

Manganese 18 

Transportation (SIC 3700) 19 

Construction (SIC 1500, 1600, 3440) 19 

Machinery (SIC 3500, 3610, 3620) 19 

Nickel 19 

Fabricated metal products (SIC 3400) 20 

Contract Construction (SIC 1500, 1600, 1700) . 20 



Page 

Chemical and allied products (SIC 2800) 20 

Machinery (except electrical) (SIC 3500) 20 

Electric and electronic equipment (SIC 3600) . . 21 

Transportation (SIC 3700) 21 

Platinum-group metals 22 

Industrial chemicals (SIC 2819, 2869) 22 

Petroleum refining (SIC 2911) 23 

Electrical and electronic (SIC 3622, 3661, 

3679, 3694) 23 

Motor vehicle parts and accessories (SIC 3714) 23 
Medical and dental equipment and supplies 

(SIC 3843) 24 

Jewelry and precious metals (SIC 3911) 24 

Tin 24 

Industrial chemicals (SIC 2819) 25 

Metal cans (SIC 3411) 25 

Motor vehicles (SIC 3711) 25 

Electronics (SIC 3621, 3622, 3651, 3674, 3679) 26 
Construction machinery and equipment (SIC 

3531) 26 

Valves, pipe fittings, metal foil and leaf, col- 
lapsible tubes (SIC 3494, 3497, 3499) 26 

Titanium 26 

Aircraft engines, engine parts, auxiliary equip- 
ment (SIC 3728) 27 

Fabricated plate work and special industrial 

machinery, n.e.c. (SIC 3443, 3559) 27 

Tungsten 27 

Machine tool accessories, metal cutting ac- 
cessories, metalworking machinery (SIC 3541, 

3545, 3549) 27 

Construction machinery, mining machinery, 

oil field machinery (SIC 3531, 3532, 3533) ... 28 
Electrical equipment and supplies, n.e.c. (SIC 

3699) 28 

Other 28 

Zinc 28 

Construction (SIC 1500, 1610, 1620) 29 

Motor vehicles and equipment (SIC 3710) 29 

Air conditioning and heating (SIC 3585) 30 

Heating equipment and plumbing fixtures 

(SIC 3430) 30 

Other 30 

Conclusions 30 

Factors affecting intensity of use 30 

Related studies 31 

Appendix.— Equations 32 



ILLUSTRATIONS 



Page 

1. Domestic consumption for 12 major metals, 1972-82 4 

2. Cobalt apparent consumption, 1950-84 8 

3. Aluminum intensity of use and consumption in metal cans, 1972-93 9 

4. Aluminum intensity of use and consumption in internal combustion engines, 1972-93 10 

5. Chromium intensity of use and consumption in the transportation industry, 1972-93 11 

6. Cobalt intensity of use and consumption in machinery and machine tools, 1972-93 13 

7. Copper intensity of use and consumption in air conditioning and heating equipment, 1972-93 15 

8. Lead intensity of use and consumption in storage batteries, 1972-93 17 



IV 

Page 

9. Manganese intensity of use and consumption in the transportation industry, 1972-93 18 

10. Manganese intensity of use and consumption In machinery, 1972-93 19 

11. Nickel intensity of use and consumption in nonelectric machinery, 1972-93 21 

12. Nickel intensity of use and consumption in electric and electronic equipment, 1972-93 21 

13. Platinum intensity of use and consumption in motor vehicle parts and accessories, 1972-93 24 

14. Tin intensity of use and consumption in metal cans, 1972-93 25 

15. Titanium intensity of use and consumption in fabricated plate work and special industrial machinery, 1972-93 26 

16. Tungsten intensity of use and consumption in metalworking machinery, 1972-93 28 

17. Zinc intensity of use and consumption in motor vehicle parts and accessories, 1972-93 29 



TABLES 

Page 

1. Summary statistics for intensity of use and consumption 3 

2. Aluminum intensity of use and consumption 9 

3. Chromium intensity of use and consumption 11 

4. Cobalt intensity of use and consumption 12 

5. Copper intensity of use and consumption 14 

6. Lead intensity of use and consumption 16 

7. Manganese intensity of use and consumption 18 

8. Nickel intensity of use and consumption 19 

9. Platinum (platinum-group) intensity of use and consumption 22 

10. Palladium (platinum-group) intensity of use and consumption 22 

11. Iridium (platinum-group) intensity of use and consumption 22 

12. Tin intensity of use and consumption 25 

13. Titanium intensity of use and consumption 26 

14. Tungsten intensity of use and consumption 27 

15. Zinc (slab) intensity of use and consumption 28 

A-1. Aluminum equations 32 

A-2. Chromium equations 32 

A-3. Cobalt equations 32 

A-4. Copper equations 32 

A-5. Lead equations 33 

A-6. Manganese equations 33 

A-7. Nickel equations 33 

A-8. Iridium (platinum-group) equations 33 

A-9. Palladium (platinum-group) equations 33 

A-10. Platinum (platinum-group) equations 33 

A-11. Tin equations 33 

A-12. Titanium equations 33 

A-13. Tungsten equations 34 

A-14. Zinc equations 34 



UNIT OF MEASURE ABBREVIATIONS USED IN THIS REPORT 


s 


gram 


st 


short ton 


lb 


pound 


tr oz 


troy ounce 


mt 


metric ton 


yr 


year 


%/yr 


percent per year 







DOMESTIC CONSUMPTION TRENDS, 1972-82, AND FORECASTS 
TO 1993 FOR 12 MAJOR METALS 



By Staff, Bureau of Mines, U.S. Department of the Interior, 
and Basic Industries Sector, U.S. Department of Commerce 



ABSTRACT 



Consumption and intensity of use trends for 12 metals, by industrial end use, were 
estimated for 1972 through 1982 by the Bureau of Mines and U.S. Department of Com- 
merce. The trends were then forecast through 1993 using standard statistical methods. 
The intensity of use measure selected is the quantity of metal consumed per constant 
dollar output of a specific industrial sector. The metals studied were aluminum, 
chromium, cobalt, copper, lead, manganese, nickel, the platinum-group metals, tin, 
titanium, tungsten, and zinc. 

Average annual growth rates for the following 4 of the 12 metals increased from 
1972 to 1982 as follows: aluminum, 1.00%; platinum-group metals (consisting of 
platinum, palladium, and iridium), 8.83%; titanium, 7.82%; and tungsten, 6.09%. Con- 
sumption for the remaining eight metals decreased at average annual rates ranging 
from 0.58% (copper) to 5.37% (manganese). 



ACKNOWLEDGMENTS 



Project coordinators for this publication were Patricia 
R. Devine, Divisions of Minerals Policy and Analysis (MPA), 
Bureau of Mines, and Robert C. Reiley, Baisic Industries Sec- 
tor (BIS), U.S. Department of Commerce. Staff assistance 
was provided by Barry Klein, Pamela A. Smith, Elizabeth 
Yaremchuk, Michael Zevitz, and Linda Johnson, all of 
MPA, and Donald Dalton of BIS. They were assisted by 



Bureau of Mines commodity specialists and BIS economic 
and statistical analysts (see chart), who analyzed the 
movements of both intensity of use and consumption for 
each metal. Also, Denny Place and Rod Renner of the 
Natural Resources Division, U.S. Federal Emergency 
Management Agency, provided historical data series for all 
metal consumption. 



Commodity Bureau of Mines 

Aluminum Frank X. McCawley 

Chromium John F. Papp 

Cobalt William S. Kirk 

Copper J. L. W. Jolly 

Lead William D. Woodbury 

Manganese Thomas S. Jones 

Nickel Peter G. Chamberlain 

Platinum-group metals. ... J. Roger Loebenstein 

Tin James F. Carlin, Jr. 

Titanium Langtry E. Lynd 

Tungsten Philip T. Stafford 

Zinc 



Department of 
Commerce 



James S. Kennedy 

James S. Kennedy 
Robert C. Reiley 
David Stonfer 

Graylin Presbury 
James Manion 
James S. Kennedy 
James Manion 
James S. Kennedy 
David Stonfer 



SUMMARY 



The objective of this study was to analyze changes in 
the domestic consumption of major nonferrous metals be- 
tween 1972 and 1982, and to isolate the changes reflecting 
structural movements. Structural changes are permanent 
or long-term changes, as opposed to cyclical changes, which 
are primarily driven by the level of economic activity. The 
metals studied were aluminum, chromium, cobalt, copper, 
lead, manganese, nickel, the platinum-gi'oup metals, tin, 
titanium, tungsten, and zinc. 



ANALYTICAL METHOD 



The movements of both intensity of use and consump- 
tion for each metal were analyzed by economic and 
statistical analysts and by commodity specialists from the 
Bureau of Mines (BOM), U.S. Department of the Interior, 
and the Basic Industries Sector, U.S. Department of Com- 
merce (DOC). This group subjectively determined the pat- 
terns of metal use in the industries and the validity of the 
forecasts based on the trends, the projections, and the Chase 
Econometrics forecast of industrial output. Projections of 
metal requirements for each industrial sector were adjusted, 
when necessary, based on the expert judgment of BOM and 
DOC staff. 



The analytical method employed and the time period 
chosen for the study sought, to the extent possible, to 
separate secular or structural movements from those caused 
by variations in the business cycle. The method used is a 
variation of an approach called intensity of use, in which 
consumption per unit of gross national product (GNPi is 
regressed on time, with the refinement that the dependent 
variable (intensity of use) is a ratio of the quantity of metal 
consumed in a specific industry to the constant dollar out- 
put of that industry. In a simple trend analysis with an- 
nual data, as used in this study, the secular trend is the 
coefficient of time (the independent variable); non-time- 
related fluctuations are embodied in the error term of the 
equation. The use of the intensity of use ratio reduces fluc- 
tuations due to the economic cycle and growth. If both metal 
consumption and the user industry grow at the same rate, 
the intensity of use ratio is constant and exhibits a horizon- 
tal trend line over the period of study, indicating that metal 
use per unit of output is unvarying through the business 
cycle. If, instead, the numerator and denominator of the 
ratio are changing at different rates, indicating that more 
or less metal per unit of output is required, the trend line 
will not be horizontal but will have a positive or negative 
slope, as indicated by the regression coefficient. 

In addition to using the intensity of use ratio, the par- 
ticular time period selected for the study, 1972-82, further 
reduced the influence of cyclical variations and includes 
only one cyclical turning point (1975). This period was also 
selected because of data availability for most metals and 
their end uses. A longer estimation period would have in- 
troduced more points of inflection and perhaps shown the 
cyclical movements more clearly, but it also would have 
blurred the impacts of cyclical and structural variations 
which the intensity of use technique tried to separate. 
Although it is recognized that a number of causes can af- 
fect the movement of this ratio, the isolation of these causes 
by means of an econometric specification was not attempted 
in this study. 

The analysis involved two major calculations. First, the 
regression equation estimates the best fitted intensity of 
use trend line over the 1972-82 period. The trend line is ex- 
tended from 1982 to 1993, using the same equation. Second, 
the equation is algebraically transformed to estimate con- 
sumption (see appendix) and extended to 1993, using 
estimates of industrial outputs as independent variables. 
The discussion of each metal is accompanied by estimates 
of both the intensity of use and consumption by major in- 
dustrial users. The two-stage calculation has the advantage 
of clarifying whether the metal's grow^th, or lack of growth, 
is largely a function of intensitj' of use or of economic 
performance. 



RESULTS 

A total of 232 regi-essions were run for the metals 
studied, varying in number from only 2 major end uses for 
titanium to more than 30 for copper, lead, and zinc. Usually 
there were fewer than five major users of each metal, whose 
combined use of the metal was over 60^c of total consump- 
tion. These individual users are shown in the tables and 
figures for each metal; the remaining industrial uses are 
combined into the category "other uses". Only 19% of all 
the metals' intensity of use trends analyzed show increas- 
ing use of metal per unit of output. 

Only the following four metals exhibited consumption 
growth during the 1972-82 period: aluminum, the platinum- 
gi-oup metals, titanium, and tungsten. Consumption of the 
remaining eight metals decreased at average annual rates 
varying from l'7( (copper) to 5'7c (manganese, tin, and zinc) 
(table 1). Two of the four metals with growth in consump- 
tion derived their growth primarily from single markets: 
aluminum from metal cans, and platinum from catalytic 
converters. Only titanium and tungsten experienced in- 
creased consumption in a majority of end uses during the 
1972-82 period. Over 90% of the total end uses for 
chromium, manganese, and tin required decreasing quan- 
tities of metal. (See table 1.) 

It is possible for consumption to increase at the same 
time that intensity of use decreases if there is strong growth 
in the industry using the metal; i.e., less metal per unit but 
more units produced, and therefore, increased metal con- 
sumption. This is more clearly illustrated in individual 
cases than in the aggregate; e.g., in the use of lead in storage 
batteries. This effect, however, was not often observed dur- 
ing the 1972-82 period. 



INDIVIDUAL METAL SUMMARIES 

Aluminum intensity of use is level or decreasing in 18 
of 21 industries in which it is used, but is increasing in its 
major market, metal cans, which accounted for 26% of 
aluminum consumption in 1982. Industry research is 
developing new and expanded uses of the metal and has 
contributed to good performance throughout the period. 
Consumption is projected to increase about 23% by 1993, 
and aluminum can use will constitute around 30% of total 
consumption. 

Chromium intensity of use and consumption declined 
in every end use. Chromium remains a stable percentage 
component of specific alloy and stainless steels, but the mix 
of steels in marketed goods has changed to one that gener- 



Table 1.— Summary st atistics 

Intensity of use Consumption 1 972-82 period 

(1972 = 1.0)' (1972 = 1.0 )' Avconsump- End use with 
Metal 1977 ige'a 1977 1982 tion growth decreasing 

rate, %/yr intensities, °/o 

Aluminum . . . . 0833 olees 1.073 0.976 ToO 62 

Chromium 758 .399 1.016 .569 -3.39 100 

Cobalt 789 .413 .941 .588 -2.74 75 

Copper 731 .574 .976 .817 -.58 78 

Lead 827 .560 1.065 .802 -1.17 87 

Manganese... .864 .345 1.113 .492 -5.37 100 

Nickel 762 .461 .981 .657 -.43 80 

Platinum 

groups 802 .827 1.468 1.677 8.83 62 

Tin 671 .402 .864 .573 -4.77 91 

Titanium 964 .931 1.242 1.326 7.82 50 

Tungsten 987 .739 1.271 1.053 6.09 43 

Zinc 604 .387 .777 .551 -4.80 86 

'In calculating an aggregate intensity of use, the consuming industry is the 
same for each metal: Final sales of durable goods In constant 1972 dollars, 
adjusted for inventory change. Each Intensity Is indexed to its 1972 ratio so 
that comparisons among metals may be made. 

'Total actual consumption for each metal in individual weight units and In- 
dexed to 1972. 

^Includes Iridium, palladium, and platinum only. 

ally includes steels requiring lower chromium content. The 
end-use products also contain less steel per unit value, or 
lower steel intensity as opposed to chromium intensity, but 
the combined or net effect of both these trends is to decrease 
chromium consumption. In addition, an increasing portion 
of the steel content of these products was imported steel, 
further reducing domestic demand for chromium. The 
negative trend is expected to continue. 

Cobalt consumption had an average growth rate be- 
tween 1972 and 1982 of -2.74%/yr. Because of major an- 
nual shifts in consumption, trends are difficult to determine. 
For example, cobalt consumption dropped 41% in 1975 but 
increased 41% in 1976. There is less variation in intensity 
of use, which shows declines in all uses except transporta- 
tion (superalloys). This sector is the only end use projected 
to increase in either intensity of use or consumption. In 1983 
superalloys consumed 36% of total cobalt used, and this use 
is expected to increase to 41% by 1993. The intensity of use 
and consumption levels will change dramatically if new 
cobalt-free superalloys are certified for jet engines. 

Copper consumption declined during 1972-82, reinforced 
by the decline in its major market, the construction in- 
dustry. Intensity of use increased in both heavy and general 
construction, which bodes well for periods of high growth, 
but declines in intensity of use in nearly every other end 
use will work against increased copper consumption in the 
future. Construction accounted for 53% of copper consumed 
in 1982 and is estimated to increase to 57% by 1993. 
Without new markets, copper consumption will continue 
to be dominated by cyclical forces. There is some indication 
that new markets are developing; in particular, consumers 
are increasingly interested in electric and electronic con- 
trols and gadgets and show a propensity to replace, rather 
than repair, such items as appliances and car radiators. 

Lead use in gasoline will essentially cease in the forecast 
period, thereby making lead primarily dependent on its use 
in batteries. Intensity of use is declining for 27 to 31 end 
uses of lead, including all the major ones. Therefore, lead's 
projected consumption increase of 4.5% by 1993 is entirely 
a function of increased demand for batteries. Other uses are 
projected to decline gradually or, in the case of construc- 
tion, to remain level. 

Manganese demand, like chromium demand, is deter- 
mined by the requirements of steelmaking. Unlike that of 
chromium, however, the manganese content in steel has 
declined as a function of production process changes. 
Therefore, demand for manganese has been impacted by two 



declining intensities of use: its own and that of steel. There 
is less manganese in steel, and less steel in its traditional, 
products, such as automobiles. In addition, steel imports 
have increased, which further reduces manganese consump- 
tion by whatever amount would have been required to pro- 
duce the steel domestically. In developing consumption proj- 
ects, declines in consumption were assumed to be smaller 
(about 1.9% compounded annually) than projections based 
solely on the 1972-82 experience, because operation efficien- 
cies in steel production were considered by the experts to 
be essentially complete in respect to manganese content. 
Nickel consumption has declined at an average rate of 
less than 1%/yr annually from 1972 through 1982, a figure 
that showed substantial variation from year to year. Inten- 
sity of use declined in 16 of 20 markets tested including all 
the major end uses, primarily because of substitution of 
plastics in coatings, containers, automobile parts, and 
plumbing, and because of increased imports of stainless 
steel and the replacement of stainless steel. Estimated 1993 
consumption is greater than that of 1982 by 17.6% (after 
being adjusted upward by the commodity analysts), but re- 
mains lower than the 1972 level. The increase in consump- 
tion is a function of growth in consuming industries out- 
distancing declines in intensity of use. 

Platinum-group metals (PGM's) were analyzed sep- 
arately as iridium, palladium, and platinum but reported 
together; PGM's show the strongest grow^th of the 12 metals 
studied, an average of 8.83%/yr. This is the result of 
automotive catalytic converter demand. New designs of the 
catalytic converter, however, require lower platinum con- 
tent, and little growth in intensity of use is expected. Con- 
sumption of platinum and palladium is expected to grow 
fastest in this end use, because of growth in the automotive 
industry and of growing electrical and electronics industry 
consumption. Iridium consumption and all other platinum 
and palladium market intensities of use are decreasing, ex- 
cept for palladium in medical and dental equipment. Col- 
lectively the platinum-group metals should grow about 
6%/yr in the 1983-93 period. 

Tin consumption declined on the average 5%/yr between 
1972 and 1982 and is expected to continue declining through 
1993, but at a rate of 3.2%/yr. Intensity of use declined in 
22 of 24 markets. Demand for the major end use, tinplate 
for metal cans, is diminishing owing to its replacement with 
aluminum, glass, and other materials and also to the thin- 
ner tin coatings on steel. The consumption of solder in 
automotive electronics, a small user of tin, is growing. 

Titanium intensity of use in its largest market, the 
aerospace industry, was the same in 1982 as in 1972, but 
was greater than the 1982 level in every other year except 
1976. Consumption also grew every year except 1976, ow- 
ing to both intensity growth and grow^th in the aerospace 
industry. Nonaircraft industrial demand is showing ex- 
ceedingly strong intensity growi;h, over 9% compounded an- 
nually, and in 1982 this end use constituted 30% of total 
titanium use. Both end uses are expected to show continued 
strong growth in consumption, and, more importantly, in 
intensity of use. 

Tungsten has exhibited increasing intensity of use in 
three out of five end uses, including its largest market, 
metalworking machinery and tools. Growd;h is projected to 
nearly double the current rate by 1993 because tungsten 
is consumed primarily in high-growth industries, and 
because of increasing intensity of use in these industries. 
Continued high growth in machine tools and metalwork- 
ing machinery will keep tungsten consumption increasing 



7,000 r 



700 r 





300 



4,000 



30,- 




2.500r 



w 

Z 2,300 

O 




1,500 



1.6r 




250 f- 




100 



1,600 




600 



1972 



1977 



1982 



1972 



1977 



1982 



Figure 1.— Domestic consumption for 12 major metals, 1972-82. 



40r 



lU 

^ 30 

o 

>- 
o 

E 20 



10- 



1.200r 




Iridium 




500 



1,500^ 




500 



40 r- 




1,500 





22,000 •- 




12,000 



1972 



1077 



1982 



1972 



1977 



1982 



Figure 1.— Domestic consumption for 12 major metals, 1972-82. 

Continued 



even if intensity of use levels off. Consumption is expected 
to grow almost 6%/yr in the forecast years. 

Zinc consumption as slab zinc decreased by nearly half 
between 1972 and 1982, with an average decline of 4.8%/yr. 
During this period zinc's intensity of use increased in only 
3 out of 35 industrial sectors. Automobile downsizing, the 
frequent cause of metal consumption decline, was again the 
major cause of zinc's diminished demand. Construction use 
of zinc surpassed motor vehicles and equipment uses dur- 
ing this period, because construction intensity increased and 
zinc automotive intensity did not. Future growth in the 
automobile industry is projected to outpace construction 
growth (4.4'7f compared with 2.88'7r in the Chase model). 
Slab zinc consumption is expected to grow by less than 
1%/yr in the forecast period of 1^982-93, but 1984 data 
somewhat modify the pessimism of the forecast. 



CONCLUSIONS 

Significant changes took place in the domestic consump- 
tion patterns of the 12 metals in the study between 1972 
and 1982. Total consumption and consumption per unit of 
output, or intensity of use, are decreasing for all metals ex- 
cept titanium, tungsten, and the platinum-group metals. 
Some of the metals in decline should recover to levels and 
growth rates exceeding their 1972 levels because important 
new uses have been established. Aluminum is an example 
of this category. In aggregate, however, the Nation's 
economy is substituting other goods for metals, buying more 
goods and services with lower or no metal content, and 
replacing some domestic goods containing metal with im- 
ports. If measured as consumption per capita or consump- 
tion per million dollars of real GNP, all metals in the study. 



except titanium, would be seen to decline. Total nonferrous 
metal consumption per capita in the United States declined 
37.2% between 1972 and 1982. Total nonferrous metal con- 
sumption per million dollars real GNP declined 49.2% in 
the same period. 

The analyses in this report have not quantified each 
cause of change, but have identified the major ones, by 
metal and by its end uses. One factor was singularly im- 
portant in effecting changes in metal requirements: the 
energy price increases generated by the first major OPEC 
action of late 1973. The effects on the energy-intensive 
metal industries were strongest in 1975, as seen in the total 
consumption graphs (fig. 1). The 1975 reduction in total con- 
sumption stands out in each figure; averaged over all 12 
metals, it is a 30.5% reduction. Four years of recovery 
followed, to be interrupted by the second major oil price in- 
crease in 1979. The consumption paths were already in a 
decline at the onset of the 1981-82 recession, further com- 
pounding the metal industries" problems. The average 1982 
reduction of the metals studied was 27.2%. 

Other causes common to the group have to do with 
trends rather than events, although these same events trig- 
gered some of the trends. The energy shocks are responsible 
for the shift to smaller cars and for many production pro- 
cess efficiencies requiring less metal input. Increasing com- 
petition in the world economy and the consumers' shift in 
expenditure patterns, however, are gradual long-term 
trends that were having perceptible efi"ects on metal con- 
sumption before the energy crisis. 

The study does not analyze policy options that might 
alter economic performance of the domestic metal in- 
dustries. The policies that seem to have made profound dif- 
ferences in individual cases are the industry's initiatives 
in developing new markets. 



INTRODUCTION 



The Bureau of Mines initiated this study in order to 
measure changes in metal consumption and the effects of 
these changes on the domestic minerals industry. In 1983, 
the Bureau investigated metal consumption patterns, metal 
industry employment, trade, and comparable statistics in 
other industries in order to establish whether a problem 
in metal demand existed. Results of the study lend support 
to the hypothesis that basic structural changes could be tak- 
ing place in the composition of U.S. industry, and that some 
changes did and would continue to affect the demand for 
metal. Service industries (including trade, finance, and 
transportation), which have been the largest component of 
gross national product (GNP)' since 1947, continued to grow 
faster than agriculture or manufacturing, widening the gap 
between services and all other spending, which indicated 
lower relative growth rates for construction and durable 
goods, the major markets for metals. Within the durable 
goods industries, major changes were also taking place. 
Technological developments resulted in the substitution of 
plastics and other materials for metals in manufacturing, 
and more efficient processing resulted in decreased metal 
use in some sectors. 

The final products or industries that consumed metals 



'Council of Economic Advisors. Economic Report of the President. U.S. 
GPO, Feb. 1985, p. 245. 



changed as well from 1972 to 1982. Cars were downsized, 
structures were designed to use more glass and less metal, 
and food packaging moved beyond traditional metal or glass 
containers to include plastic and paper containers. 

Metal demand has always been subject to cyclical 
changes, but the emerging metal consumption patterns sug- 
gested a departure from those of other sectors of the 
economy and from earlier periods in that there seemed to 
be an underlying downward trend for particular metal sec- 
tors. A longer period of observation (through more turning 
points) is needed before current theories regarding the im- 
pact of structural change can be accepted or rejected, but 
some facts are clear: First, that a problem may very well 
exist, and second, that analysis is required— at the very 
least, collecting information and measuring effects. Effec- 
tive policies to deal with the observed declines in many of 
the U.S. metal sectors can only grow out of a sound infor- 
mation base and analysis. 

In 1984, Bureau analysts joined in an effort with a group 
at the U.S. Department of Commerce (DOC). This report 
is a result of the joint venture. DOC had already published 
a report^ in 1983 that examined the changes in use of six 
strategic metals. The analytical methods and data bases 

''U.S. Bureau of Industrial Economics (Dep. Commerce). Markets Trends 
and Forecasts for Selected Strategic Metals. BIE-SP83-2, Apr. 1983, 40 pp. 



used by each group were similar, and both groups agreed 
to the study goals. The commodity specialists in the Bureau 
and their counterparts at DOC had in the past exchanged 
information in their research activities but had not 
heretofore collaborated on a project. 

Although this analysis was performed by the Bureau, 
DOC participated in every phase, particularly in the inter- 
pretation of results. Each of the metal analyses is a joint 
product of the specialists of both groups. A third agency, 
the Federal Emergency Management Agency (FEMA), was 



also very helpful in laying groundwork for the project. The 
Natural Resources Division at FEMA provided historical 
data series for all metal consumption at the most detailed 
level: four-digit standard industrial classification (SICf sec- 
tors. In addition, FEMA offered its computer and software 
facilities for computation of the regression equations. The 
Bureau had intended to accept the generous offer, but 
availability of its own personal computers in time for the 
start of the project was more efficient. 



ANALYTICAL APPROACH 



An analytical method was selected to measure changes 
in metal industry growth compared with growth in other 
industries; this method is a variation of the intensity of use 
measure. Intensity of use is generally calculated as the ratio 
of the quantity of a given material consumed in a specific 
time period to a constant-dollar measure of GNP in the same 
time period. An effective variation used in this study com- 
pares each metal's consumption with the constant-dollar 
value of outputs of the individual industries that use the 
metal, since that ratio should show more stability than one 
using the more heterogeneous GNP. The tonnage of tin or 
copper or aluminum used in refrigerators, freezers, and 
household appliances is a function of both the recipe for 
making the appliance and the quantity produced. The pro- 
duction formula is one definition of the structure of the in- 
dustry, and the intensity" calculation attempts to act as a 
surrogate for this measure. 

The second determinant of metal consumption, the 
quantity of production in the industry using metal, can 
cause the metal demand to change in the opposite direc- 
tion to the metal's intensity of use, if the industry's pro- 
duction is strong enough or weak enough. For example, in 
a high-growth construction period, strong demand for new 
structures may outweigh the demand for reduced metal in 
each structure (lower intensity), thereby causing total metal 
demand to increase in a declining intensity market. 

The converse is also true; declining end-use markets re- 
quiring increased metal intensity can reverse the potential 
metal consumption surge that would otherwise occur. The 
intensity measure tends to reduce cyclical changes em- 
bodied in total consumption because they are per-unit 
measures. Intensities are always converted to consumption 
levels for the forecast years. The consumption forecast, or 
the quantity of metal required for any specific time period 
or scenario, is the product of intensity times a measure of 



industry's output of that time period or scenario. The 
resulting metal consumption estimate is the amount that 
will be consumed, if the production formula does not change, 
to produce exactly that level of industrial output. 

The statistical technique used to estimate the best-fitted 
line around these intensity data points through the given 
time period (1972-82) is a simple linear regression, or a least 
squares equation. The equation describing the line has 
measurable statistical properties, which evaluate the ac- 
curacy of the fit and enable the analyst to determine if the 
intensity trend line is truly moving in a significant direc- 
tion. Depending on the accuracy of the fit, and on the nature 
of changes anticipated in engineering and economic rela- 
tionships, the analyst may project the trend line into the 
future and examine levels of intensity that might occur 
should the trend continue. In addition, metal consumption 
levels may be examined that would be required at the future 
intensity levels, given a forecast of future industry output. 
The forecasts of industry outputs used to derive metal con- 
sumption from intensity were estimated by Chase 
Econometrics Inc. at the four digit SIC level and are Chase's 
standard long-term interindustry forecasts, in constant 1977 
million dollars, for 480 industrial sectors of the U.S. 
economy. 

The intensities and their equations were calculated for 
the 1972-82 time period, or in some cases, through 1983, 
where data were available. The equations are shown in the 
appendix. For each metal, the trend was extended through 
1993, and these intensities were the basis for estimation 
of projected metal consumption. Figures shovdng both in- 
tensity and consumption are shown for at least one major 
user of each metal. Tables of intensities and consumption 
of all major users are given. The entry marked "other" in 
the consumption tables is the sum of all remaining uses for 
that time period. 



INTERPRETATION OF RESULTS 



There are several points regarding the intensity method 
which analysts must consider when interpreting results of 
the consumption forecast and projections of intensities. 
First, the statistical calculations make no assumption 
regarding cause and effect. The factors determining events 
that cause the numerator or denominator to move up or 
down must be identified by the analysts. In this study, for 
example, in examining the intensities plotted against time, 
a low point occurred in 1975 for each metal. The cause can 
be associated with the OPEC oil embargo and energy price 
increase. 



Other movements are less easily associated with possi- 
ble causes. Irrespective of the cause(s), an intensity equa- 
tion with a high R-square statistic (a measure of the preci- 



'The Standard Industrial Classification (SIC) defines an industry based 
on its primary economic activity, thereby aggregating similar products or 
functions under one heading. The code was developed by Office of Manage- 
ment and Budget to promote the comparability of statistics. The four-digit 
codes each denote a specific industry. 

■"For convenience, "intensity" is used for "intensity of use" throughout 
this report, except as necessary for clarity. 



sion), whether of positive or negative slope, is an indica- 
tion that structural changes are present. An intensity that 
remains stable through economic cycles, represented in the 
denominator by industry output cycles, is interpreted as a 
metal largely unaffected by structural change. Finally, an 
intensity that varies imprecisely, or a function with a low 
R-square and no logical movement around known events, 
says little about the presence or absence of structural 
change, and no conclusions are drawn. 

The method assumes definitions are constant, but in the 
case of industry output they usually are not. Even at disag- 
gregate levels, the total industry mix of products changes 
frequently. The machinery sector, for example, is defined 
for a given mixture of machines and given levels of each. 
An intensity calculation could change by shifting produc- 
tion levels from one type of machine to another in its mix- 
ture without altering metal composition in components of 
any one type, but the shift would change the calculated 
intensity. 

The position of imports in the calculations is also rele- 
vant. Imports are included in the metal consumption data, 
because both domestic and imported metal are consumed 
by the end-use domestic industry and are insepai-able in any 
product containing the metal. Imports treatment becomes 
a problem when imports occur further along in the produc- 
tion process, since there is a high probability that many 
imported products contain metal. Consider the calculation 
of copper used in automobile parts and accessories. Copper 
purchased by the automobile parts and accessories industry 
is the basis of the intensity value; copper purchased as a 
component of an imported intermediate part, perhaps in a 
car radio or radiator, is not identified as copper, and 
therefore not included in the copper estimate. Given the 
48.6% increase in imports of durable goods during the time 
period covered by the study, it is almost certainly true that 
actual metal intensities are underestimated. This effect 
could be measured using input-output analysis, which is not 
a part of the present study, but an already completed study 
does give rough estimates of this difference.^ 

For primary nonferrous metal manufacturing, the metal 
contained in imported intermediate production goods added 
21% to the imports in 1978. It had increased to 21.5%, by 
1979 and to 25.2% in 1980; but in 1981, it dropped to 22.8%. 
In 1982, contained nonferrous metals in imported goods 
added 24.7% to direct imports of nonferrous metals. 

For this study metal consumption is estimated 
specifically for primary (some data included scrap) metal 
used in the United States for the manufacture of in- 
termediate and final goods, and that quantity is a direct 
function of domestic manufacturing demand. It is only in- 
directly a function of imports containing metal, in that those 
imports replace and reduce domestic production of similar 
goods. Given the level of domestic production, the metal in- 
tensity and consumption calculated here are for the primary 
metal used in that production in all of its phases. One might 
conclude that in the absence of the semimanufactures im- 
ports, domestic manufactures might have required in- 
creased consumption of about 25% in primary nonferrous 
metal, but the additional metal might also have been 
imported. 




1950 1955 1960 1965 1970 1975 1980 1984 
Figure 2.— Cobalt apparent consumption, 1950-84. 



A final consideration in interpreting results is the time 
period covered in the estimation. If a metal's consumption 
is cyclical, the position within that cycle, i.e., the time span 
when estimates are developed, will determine the trend 
direction. Figure 2, which ch£irts cobalt consumption for the 
period 1950-84, shows three such periods: declining use until 
the late 1950's, high growth through the 1960's, and declin- 
ing growth in the 1970's. For an estimation of a single 
straight line representing the 1956-80 period, the growth 
periods would strengthen the upward trend and project in- 
creased future growth. Isolating the 1972-82 period, 
however, would project negative growth in the future. Only 
the informed analyst can know of events tsiking place within 
the industry and the economy that might reverse the trend. 
Without that knowledge one is left to assume present trends 
will continue, if other events do not interrupt the process. 
In this study the starting assumption was that the 
calculated trend is the expected metal demand for the given 
industry, but the demand was adjusted by the specialists 
based on their analysis of events that would significantly 
impact metal consumption. 



ALUMINUM 

The consumption of aluminum was examined in this 
study for 21 end-use sectors in the U.S. economy. Consump- 
tion increased in six sectors from 1972 to 1982, dominated 
by metal can use, which accounted for 10%- of total 
aluminum in 1972 and rose to 26% in 1982 (table 2). Inten- 
sity of use of aluminum is given for six major sectors in table 
2. Aluminum intensity of use remained relatively sta- 
tionary, with just 3 of the 21 sectors having increased in- 
tensity of use during the period. 

Total U.S. aluminum consumption^ was essentially the 
same in 1972 as in 1982, with significant variations in in- 
tervening years and in individual industrial sectors. (See 
figure 1.) Aliuninum industry research, which has developed 
new and expanded uses for the metal, has contributed to 
aluminum's good performance compared with that for other 
metals throughout this historical period. For 1982 to 1993, 
total domestic aluminum consumption is projected to in- 
crease more than 23%, although the intensity of use ratios 
are forecast to decline for 10 of the 21 end uses studied. 



^The U.S. International Trade Commission (ITC) used this technique to 
study trade-related employment; to the extent labor quantities are propor- 
tional to the quantity of the goods labor produces (i.e., labor to output ratios 
are constant), their results can at least give an order-of-magnitude estimate. 
The time period covered by the ITC study is 1978-82, a period of high growth 
in imports. Source: U.S. International Trade Commission (DOC). U.S. Trade 
Related Employment. Publ. 1445, Oct. 1983, 126 pp. 



Total to domestic users of end-use shipments of aluminum products in 
the United States (including scrap). Consumption data are unavailable for 
aluminum, so shipment data are used instead. Distribution to end uses is 
based upon Aluminum Association, Census Bureau, BOM end-use data, and 
DOC estimates. Source; Aluminum Association: U.S. Bureau of Census 
(DOC); U.S. International Trade Administration (DOC); BOM end-use data. 



Table 2.— Aluminum intensity of use and consumption 

Actual Forecast 

'"'^"^"^^' 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND SHORT TONS 

PER MILLION 1977 DOLLARS 

Metal cans 0.078 0.200 0.267 0.345 

Sheet metal work 104 .071 .064 047 

Electric and electronic .007 .005 .003 .001 

equipment 
Motor vehicle bodies, parts, .006 .007 .008 .009 

and accessories 
Transportation equipment .006 .004 .004 .003 

CONSUMPTION, THOUSAND SHORT TONS 

Metal cans 569.5 1,477.0 -1,729.1 "2,089 

Sheet metal work 535.6 364.0 465.9 429 

Electric and electronic 530.3 455.0 404.0 207 

equipment 

Motor vehicle bodies, parts 520.8 512.0 786.0 1,017 

and accessories 

Transportation equipment .. . 253.4 209.0 210.0 162 

Other 3,337.4 2,593.0 3,209.0 3,013 

Total 5,747.0 5,610.0 6,804.0 6"^ 

'These industries (except "other") accounted for 54% of total aluminum con- 
sumption in 1982. 

'Subjective value selected over regression value. 



Metal Cans (SIC 3411) 

The largest end-use market for aluminum is metal cans. 
Aluminum has replaced steel as the primary raw material 
for making beverage cans. As a result, the intensity of 
aluminum consumption (tonnage) in metal can output 
(measured in 1977 dollars) increased substantially during 
the 1970's and early 1980's. The aluminum share of the 
metal can market is expected to continue to increase but 
at a slower rate than indicated by the 1987 and 1993 
calculated projections, despite the very high correlation,' 
as illustrated in figure 3. The primary reason is that the 
beverage can market is now virtually dominated by 
aluminum; therefore little additional substitution of 
aluminum for steel in this end use is possible. 

Aluminum has room for expansion in the food market, 
where it has a 4% share, but the market, which is dominated 
by tinplated steel, is only half as large as the beverage can 
market. Also, the adoption of aluminum by food container 
manufacturers is expected to be a relatively slow process 
because of imcertainties regarding the alimiinum-steel price 
relationships coupled with capital costs associated with such 
a conversion. The conversion costs are more significant for 
food cans than they were for beverage cans because of the 
technology needed to prevent collapse of aluminum cans by 
(1) introducing internal pressure (which is already provided 
by carbonation in beverage cans) and (2) building structur- 
ally strong aluminum cans. For these reasons, the projected 
trends shown in figure 3 were rejected by commodity ex- 
perts, and the lower consumption level shown in table 2 was 
substituted. 

There will be slight growth in the metal cans market, 
hence in aluminum consumption, resulting from increased 
population, but this will be partially offset by production 
of thinner wall cans in the future. This will enable produc- 
tion of 10% more cans per pound of aluminum. 

Aluminum industry efforts have been largely respon- 
sible for the success of aluminum cans. Through its efforts, 
more than 50% of all aluminum cans are recycled, which 
has helped aluminum to be competitive with relatively 



0.4 r 



M CC 

5 < 

e d 3 

^ o 

< § 

o z 

J a: .1 



4, Intensity 



Forecast .- ' 



.^ 



Actual 



.01— I— L- 
1972 



I I I I I I I LJ I I I I 1 l_I I I I 

1983 1993 



4,000 



O 3,000 



O 

w 2,000 
O 

z 
< 

§ 1,000 



B, Consumption 



^ 



Forecast ^m' 



Actual 




I I I I I I I I I I I I I I I I I 



1972 



1983 



1993 



'An R-square of 0.98 for this equation is shown in table A-1. 



Figure 3.— Aluminum intensity of use and consumption in 
metal cans, 1972-93. 

cheap steel cans. The aluminum industry is also conduct- 
ing research on producing an aluminum foil food pouch that 
can be used in microwave ovens. 



Sheet Metal Work (SIC 3444) 

Sheet metal work constituted 6.4%- of 1982 aluminum 
consumption. It is an end-use market comprising a number 
of products consumed by the construction industry; for 
aluminum, it consists primarily of residential siding. The 
intensity of use in the sheet metal industry has declined 
substantially (32%), primarily because of substitution of 
vinyl siding for aluminum siding. This was largely the 
result of the changing altuninum- vinyl siding price relation- 
ships. During the 1970's aluminum siding's narrowing price 
advantage over vinyl siding disappeared completely, such 
that in the late 1970's vinyl siding prices gained an ever- 
growing advantage over prices for aluminum siding. The 
result was that, in 1982, shipments of vinyl siding for the 
first time exceeded those of aluminum siding; recently, vinyl 
siding has had a 60% share of the market compared with 
40% for aluminum. Vinyl siding, in addition to a lower price, 
has the advantage that the color is distributed throughout 
the material and its appearance is less easily marred by 
scratches and dents. Aluminum, on the other hand, dents 
easily and has only a surface coat of paint, making scratches 
more noticeable. 

The quantity of aluminum to be used in construction 
applications relative to competing materials is expected to 
continue declining as use of vinyl continues to increase and 
as wood, the traditional material, regains some of its former 
market share. Given these considerations, the aluminum 
intensity and consumption for 1987 and 1993 reasonably 
represent this end-use. Other sheet metal and construction 



10 



uses will remain the same or increase, since the construc- 
tion industry will in itself increase, but its alimiinium siding 
component will cause total aluminum use in this market 
to decline. 

Electric and Electronic Equipment (SIC 3600) 

The ratio of aluminum consumption to total output 
value of electric and electronic equipment has declined and 
is expected to continue to decline. One reason is the 
miniaturization of electronic equipment, which has substan- 
tially reduced the amount of aluminum consumed per unit 
produced (intensity); another is substitution, primarily by 
plastics. Also, aluminum use for household wiring, which 
began in the 1960's, declined sharply in the 1970's, when 
such uses were associated with fires. Aluminum wiring re- 
quires special compatible electrical outlet boxes and con- 
tacts, and problems arise when aluminum wiring is in- 
stalled with outlet boxes and brass screws designed for cop- 
per wiring. For example, because aluminum has a different 
expansion coefficient than brass screws, a change in 
temperature can cause an electrical contact to become loose, 
generate heat, and possibly result in a fire. In spite of the 
fact that correctly installed aluminum wiring does not pose 
a fire hazard, building codes do not allow aluminum wir- 
ing in some areas, and some builders and homeowners try 
to avoid aluminum wire where it is permitted. 

Despite technological developments, such as copper-clad 
aluminum wire, to try to reduce the chance of fire from in- 
correctly installed wiring, the outlook is pessimistic for 
aluminum household wiring since it cannot easily overcome 
its negative image as a potential fire hazard. Aluminum 
use in household wiring and in steel-reinforced cable is not 
expected to increase. 

Motor Vehicle Bodies, Parts, and Accessories 
(SIC 3711, 3714) 

The intensity of aluminum in the motor vehicles and 
motor vehicle parts and accessories industry (see table 2) 
has increased 1.6%/yr from 1972 to 1982 and is forecast to 
continue to increase at a slightly higher rate to 1993, about 
2.4% compounded annually. Motor vehicles and motor vehi- 
cle parts and accessories have been a growing market for 
aluminum because of the need to reduce vehicle weight and 
thereby improve gasoline mileage. This market for 
aluminum offers substantial growth potential, one of the 
most important being the substitution of aluminum for cop- 
per in automobile radiators. Aluminum radiators, however, 
have two disadvantages: they are more difficult to produce 
and more difficult to repair than copper radiators. However, 
ever for copper radiators, the trend has been that fewer 
radiators are repaired each year; they are instead ex- 
changed for new radiators. Therefore, this difficulty to 
repair aluminum radiators may not be a serious disadvan- 
tage. Early problems encountered in producing aluminum 
radiators have been overcome through technology. 

Transportation Equipment (SIC 3700) 

Aluminum consumption in transportation equipment 
(which includes all industries classified under SIC 37 ex- 
cept motor vehicle bodies, truck and bus bodies, motor vehi- 
cle parts and accessories, and truck trailers) declined dur- 
ing the 1970's. This decline is primarily the result of 
substitution of other materials for aluminum, such as com- 
posites in the aerospace industry. 



in 5 

^ o 
£° 

a z 
z o 

5d 

Si 

X (T 



1.023 
.022 
.021 
.020 
.019 
.018 
.017 
.016 
.015 
.014 
.013 
.012 
1972 

300 r 



A, Intensity 



Actual 



Forecast ^' 



iV 




J-J — LJ l__l I I I l__l ; I I I I L_l I I I 



1983 



1993 



200 



100 



S, Consumption 



Actual 



Forecast 



^ 



y 



y 




_I_J L_L 



J I L 



J I I I I I I I 



1972 



1983 



1993 



Figure 4.— Aluminum intensity of use and consumption in in- 
ternal combustion engines, 1972-93. 

Aluminum consumed in this end-use is forecast to re- 
main virtually unchanged from 1982 to 1987, and then 
decline from 1987 to 1993 (table 2). However, the introduc- 
tion of such new aluminum products as aluminum-lithium 
alloys should cause the decline to be halted and aluminum 
use to remain stable through the early 1990's. 

Other 

This category contains about 100 end uses not covered 
by the five major end uses discussed above. One of the more 
important uses within this category is internal combustion 
engines, n.e.c. (SIC 3519), which includes diesel, semidiesel, 
or other internal combustion engines, n.e.c, for stationary, 
marine, traction, and other uses. As figure 4 illustrates, 
aluminum for this use did not follow the general pattern 
of metals consumption. For most metals, both the ratio of 
consumption to industry output and the consumption 
volume show a decline in 1975 and then another downturn 
in 1979 that extends into the 1980's. However, for 
aluminum in internal combustion engines, the intensity and 
volume both declined in 1974, but then rose sharply in 1975 
and 1976, and then increased sharply again in 1983. 

The reason for aluminum's strong performance in this 
end-use is that aluminum is substituted for steel and cast 
iron in various engines and engine parts. Aluminum is 
lighter in weight than steel and cast iron, an important con- 
sideration in marine engines and especially in outboard 
motors. 

Comparing the two graphs of figure 4, one sees that 
despite the widely fluctuating actual consimiption ratio, the 
estimated tonnage tracks closely with the actual tonnage. 
Therefore, although the R-square was low at 0.51, one can 
still put confidence in the estimated consumption ratio and 
tonnage for the forecast period. 



11 



Table 3.— Chromium intensity of use and consumption 

Actual Forecast 

Industry' 

\ 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND SHORT TONS 

PER MILLION 1977 DOLLARS 

Chemicals industry 0.00095 0.00065 0.00058 0.00045 

Refractory industry 13 ,025 

Fabricated metal products .00053 ,00027 .00028 .00015 

Machinery 00033 .00010 .00005 

Transportation 00048 .00025 .00028 .00018 

Other metal 132 .066 .064 .034 

CONSUMPTION, THOUSAND SHORT TONS 

Chemicals industry 94 81 90 87 

Refractory industry 87 27 *20 *20 

Fabricated metal products .41 21 28 19 

Machinery 55 23 16 *16 

Transportation 64 30 45 33 

Other metal 220 137 162 101 

Total 561 319 361 276 

'These industries (except "other metal") accounted for 57'yo total chromium 
consumption in 1982. 

'Subjective value selected over regression value. 

CHROMIUM 

Consumption' of chromium is determined largely by the 
requirements of its largest user, steelmaking, which con- 
sumes at least half of all chromium (table 3). Chromium 
enhances hardenability, creep resistance, impact strength, 
and resistance to corrosion, wear, and galling. Stainless 
steels contain between 12% and 36% chromium; alloy steels, 
cast irons, and nonferrous alloys contain less chromium, the 
amounts varying with the individual product and grade. 
Given a specific alloy or stainless steel grade, the average 
quality of chromium required varies little. Once the total 
production value is known, chromium tonnage can be 
calculated with less error than for other ingredients. This 
should lead to calculated intensities with small variation 
over time, regardless of consumption level, but several con- 
siderations do introduce error in the measure. 

First, the end-use values reflect varying amounts of steel 
included in their industries' uses; i.e., the stable chromiiun 
intensity is superseded by the unstable steel intensity. 
Secondly, the imports of steel do not alter steel intensity 
calculations, but do alter chromium intensity calculations, 
because imported steel's chromium content was consumed 
where that steel was made and its presence is lost in this 
calculation of domestic consumption. 

Third, the heterogeneity of the product (i.e., the 
constant-dollar value of machinery or fabricated metal prod- 
ucts), can be unchanging and yet its content may vary con- 
siderably with the mix of products and even with a single 
product, if it is made diff-.rently. For example, alloys are 
becoming cleaner and more efficient in response to such 
special-purpose uses as catalytic converters and mufflers. 
The amount of chromium might remain constant, but the 
product price increases, even in constant dollars, since such 
advances represent a product change in the marketplace 
rather than an inflationary change. Therefore, in such cases 
the intensity of use decreases but does not actually repre- 
sent a change in chromium use per unit of physical output. 

Chemical Industry (SIC 2800) 

The steep and lengthy decline of apparent consumption 
in the chemical industry is reflected by the 2.8%/yr decline 



Total U.S. industrial demand, including secondjtry (scrap) supply. All data 
are adjusted from reported to apparent consumption levels, as obtained from 
the Bureau's commodity specialist for chromium. Source: Papp, J. F. 
Chromium Ch. in Minerals Facts and Problems, 1985 Edition. Bu Mines 
B 675, 1985, table 8 (p. 147). 



in intensity of use. Consumption figures stay steady due 
to chemical industry growth. The predicted 1987 and 1993 
consumption levels are consistent with the steady nature 
of historically reported consumption values. 

Refractory Industry (SIC 3297) 

Refractory industry chromium consumption and inten- 
sity series show extreme and steady decline, resulting from 
technological changes in steel-producing furnaces, the 
historical end-use for chromium-containg refractories. A 
new lower level will eventually smooth out this curve, but 
demand is not yet steady. The regression consumption value 
goes to zero, given the strength of the decline; however, that 
has been replaced by an extension through the forecast 
period of the actual 1983 value. 



0.0006 r 



2 5 .0005 h- 
£ 3 



Actual 



4, Intensity 



Forecasi 




1993 



30 



'*~*-~« Forocaat 



I I I I I I I 1 I V I I I I I I I I I I "T 



1972 



1983 



1993 



Figure 5.— Chromium intensity of use and consumption in the 
transportation Industry, 1972-93. 



Steel (SIC 3400, 3500, 3700, 9999) 

The remaining categories, defined by the American Iron 
and Steel Institute, are stainless and heat-resisting steel 
shipments by market class data adjusted by apparent con- 
sumption. These categories are fabricated metal products, 
machinery, transportation, and other metal.The large fluc- 
tuations of the steel industry are responsible for the decline 
in chromium consumption by a factor of two during the 
analysis period and are responsible for 4 yr of continuous 
declining consumption. The analysis period includes a 
significant recession (1982-83) and two large energy price 
increases. The importance of the recession on steel sectors 
was tested by recalculating all intensities and concomitant 
consumptions by statistical analysis run through 1981. 

The degree of decline is significantly reduced by 
eliminating data points for these last 2 yr (1982 and 1983). 
These are the lowest values of intensity during the analysis 



12 



period and result from the steel industry's recession from 
1978 to 1983. The predicted chromium consumption in the 
three steel categories depends on how stainless steel pro- 
duction recovers over the projected time period. 

Fabricated metal products demand for chromium per 
unit and in total halved during the 1972-82 period. The 
precipitous drop from 1979 pulled the intensity forecast 
down, but strong growth in the fabricated metal products 
industry (4.1% annual growth) throughout the forecast 
period keeps the consumption level from falling much below 
its current level. 

The machinery sector forecast by Chase Econometrics 
grows even faster— nearly 6%/yr— but the use of chromium 
through the historical period declined so intensely that its 
use reaches zero in the 1990 projection. The equation is 
quite good, with an R-square of 0.83, but logic transcends 
statistics and the 1987 value was selected as a floor value. 
This level, 16,000 st, could be reduced by continued in- 
creases in both steel and machinery imports, but it is as- 
sumed here to be a lower limit. 

The transportation sector use also continues to decline 
in intensity, but volume of consumption stays at current 
levels, owing to the slower intensity change and the 
transportation sector growth. (See fig 5.) 

None of the forecasts is at the level considered likely 
by commodity specialists in terms of actual chromium con- 
tent of those industries' outputs, because, as has been stated, 
the level is fairly stable. The Bureau projects growth* 
through 1987 close to the levels shown (see table 3) but 
assumes a new upward growth thereafter that the inten- 
sity of use trend does not project. 



COBALT 

Cobalt imparts high-temperature strength and corrosion 
resistance to super alloys. It is one of the most strongly 
magnetic elements known and has the highest Curie point, 
the temperature above which a material loses its fer- 
romagnetic properties. It is the best known binder for 
making cemented carbides. Cobalt is considered a strategic 
metal; i.e., essential to national defense, primarily because 
of its use in superalloys for jet engines. Superalloys are also 
the largest end use of cobalt since 1978, and the only end 
use with increasing ratios of intensity. 

Although cobalt's apparent consumption'" in 1982 of 
11.5 million lb was at its lowest level since 1961, it re- 
bounded in 1983, reaching 15.7 million lb. Between 1972 
and 1982 cobalt consumption decreased 41.2%, or 3.5% com- 
pounded annually, but individual changes from one year 
to another were so varied throughout this 1972-83 estima- 
tion period that extreme movements in demand made it dif- 
ficult to discern trends in consumption and intensity with 
statistical significance. For example, in 1976 consumption 
increased 41% after decreasing by the same large amount 
in 1975. 

The cobalt projections were not used as calculated from 
the regression equations, because they trended too severely 
and the statistical properties of the regressions were poor, 
except for cobalt use in magnets. In seeking to find a level 
all analysts agreed was likely, the commodity specialists 



'Work cited in footnote 8. 

"Total apparent consumption of U.S. industrial demand (includes primary 
demand and secondary supply). Apparent consumption = primary produc- 
tion + production from old scrap -I- (imports - exports) + (beginning inven- 
tories - ending inventories). Source: Kirk, W. S. Cobalt Ch. in Minerals 
Facts and Problems, 1985 Edition. Bu Mines B 675, 1985, pp. 171-183. 



Table 4.— Cobalt intensity of use and consumption 

, . , Actual Forecast 

Industry 

1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND POUNDS 

PER MILLION 1977 DOLLARS 

Chemicals, paints, and 

ceramics and other 0.121 0.063 0.042 0.003 

Machinery and machine tools . .044 .026 .018 .003 

Electrical 325 .059 V059 *.059 

Transportation 093 .096 *M29 **.129 

*1982 intensity substituted for calculated value. 
**1983 intensity substituted for calculated value. 

CONSUMPTION, THOUSAND POUNDS 
Chemicals, paints, and 

ceramics and other 6.195 3,683 3,136 *6,000 

Machinery and machine tools . 2,907 1,886 *2,259 '2,259 

Electrical 6,069 1,867 *2,350 *3,022 

Transportation 4,294 4,015 *7,014 *7,916 

Total 19^456 11,451 14,759 19/197 

'Subjective value selected over regression value. 



acknowledged there were many unknowns, especially in 
transportation and electrical end uses. They therefore 
agreed to disagree, and the consumption total presented in 
table 4 is the lower of the two. The alternative forecast, pro- 
posed by the BOM commodity specialist, projects total con- 
sumption of 17.5 million lb in 1987 and 22.5 million lb in 
1993. These alternative consumption projections are based 
on cobalt's strong rebound in 1984, new electrical uses, 
delayed certification of cobalt-free superalloys, and con- 
tinued strong economic growth. The following discussion 
of each end use describes in what way the consumption 
forecasts differ from the regression values. 

Chemicals, Paints, Ceramics and OtheM^ 

Catalysts and driers are the major consumers in this 
broad end-use category. Cobalt is used in catalysts to 
facilitate the removal of sulfiu* and vanadium from crude 
oil. In paints it is used as a drier to accelerate and control 
the rate of drying. Other uses, such as ceramics and 
radioisotopes, are important but of low volume, usually just 
several hundred thousand pounds annually. 

Cobalt used in chemicals, paints, and ceramics increased 
until 1974, and then both consumption and intensity fell 
in 1975. ThereEifter, cobalt intensity and tonnage changed 
direction each year until 1979 when both declined and have 
been slow to recover. Both consumption and intensity were 
up in 1983, but neither had reached the pre-1979 level. 

Consumption in these end uses is not expected to fall 
below the projected 1987 estimate of 3,136,000 lb. Since 
most "sweet" oil has been discovered and consumed, it is 
increasingly likely that now prevalent "sour" oil will re- 
quire catalysts for sulfur removal.For this reason the 1993 
consumption level was raised from the very low calculated 
level of 247,000 lb to 6 million lb. 

Machinery and Machine Tools 

One of the major end uses of cobalt in machinery and 
machine tools is cemented carbides, in which consumption 
has been little reduced by substitution, because no effec- 
tive general substitute exists at this time. There are, 
however, cobalt-free substitutes in some applications but 
with a loss of productivity. Figvu-e 6A shows, however, that 
intensity of use has steadily declined. The upward move- 
ment in 1978 and 1979 cycled back down for the next 3 yr. 



"SIC codes not listed for end uses because data source did not use SIC 
distribution. 



13 



0.07 

i .06 

_j 

B w 05 



U) -I .04 
Q O 
z a 






.03- 



Q '- 

2 .02 



.01 



.00 



-A 


/), Intensity 






' w 


^ Actual 






IT \> 


■^ 






- 


^'. 






„ 


^, 


^^ Forecast 




1 1 1 1 1 


1 1 1 . 1 1 1 1 


*. 
1 1 1 1 


1 1 T 



S, Consumption 




"*^it Forecast 



Figure 6.— Cobalt intensity of use and consumption in 
machinery and machine tools, 1972-93. 



If the projections followed the decreasing intensity path, 
1987 consumption would be only 1,694,000 lb and 1993 con- 
sumption would be just 367,000 lb. (See fig. SB.) Unless a 
more satisfactory substitute for cobalt in cemented carbides 
for cutting tools is found, such a projection is unlikely. If 
the 1983 intensity of 0.032 continued, projections for 1987 
would increase to 2,966,000 lb and for 1993 to 3,655,000 
lb. This seems unlikely, considering the steady intensity 
decline since 1972. Therefore, the forecast was adjusted to 
a floor level not less than the actual 1983 amount of 
2,259,000 lb. 

Electrical 

Consumption of cobalt in electrical uses (magnetic 
alloys) is the end-use area experiencing the greatest change 
in recent years. Substitution for cobalt in magnets began 
in earnest during the perceived cobalt shortage of 1977-78 
and continued afterwards. 

Most of this substitution was in the form of ceramic 
magnets replacing cobalt-containing magnets, particularly 
when alnico magnets used in speakers were replaced by 
lower cost ceramic magnets. Substitution is still occurring 
and will continue because of the introduction of the newly 
developed iron-neodymium-boron magnets. These new mag- 
nets are more powerful, and should become less expensive, 
than those containing cobalt. 

The use of non-cobalt-containing magnets has been so 
pervasive in this sector that intensity of use was reduced 
82% in just 10 yr. The statistical trend has a high R-square, 
and consumption is brought to zero before 1987 with these 
intensity of use ratios. Given that most of the changeover 
could have already taken place, and the possibility of 
market development for two new applications, the inten- 
sity for 1982 was assumed to continue through 1993, at- 



taining a consumption level of 2.4 million lb in 1987 and 
nearly 3.0 million lb in 1993. 

The first new application is the use of an 85% Co-15% 
Ni alloy coating on video recording tape. The alloy 
significantly increases the storage capacity of the tape, 
allowing videotape cassettes and, therefore, video cameras 
to be much smaller, lighter, and more portable. Sales of the 
new, smaller videocassettes and cameras began in 1984. The 
second new application is the use of 80% Co-20% Cr alloy 
coating on computer diskettes, resulting in a 10-fold in- 
crease in storage capacity. Before these new diskettes reach 
the marketplace, however, computers must be redesigned 
so that their mechanical components are more precise and 
their electronic components are more sensitive. 

Transportation 

In 1983 transportation, or superalloys uses, accounted 
for 5.6 million lb, or 36% of total cobalt consumption. The 
primary use of superalloys is in jet aircraft engines. Cobalt 
intensity of use in superalloys has varied between 0.065 and 
0.129 (100%), but shows a definite pattern of increase from 
1972 to 1983. Certifying a new superalloy for use in air- 
craft is a costly and time-consuming process; therefore, new 
superalloys are developed only if performance benefits can 
be achieved. A joint program by the U.S. Air Force and Pratt 
& Whitney has developed two new cobalt-free superalloys. 
These superalloys were developed for the next generation 
of jet fighter aircraft and are reported to offer significant 
improvements over currently used materials. General Elec- 
tric, which won authorization to become an engine producer 
for the F-16 fighter in 1984, has developed technologies that 
lower cobalt content 30%'^. If these new superalloys prove 
to be cost efficient, their widespread use would profoundly 
affect the use of cobalt in superalloys. With new superalloy 
certification, the level could be considerably lower than that 
shown in table 4. 

The superalloys demand for cobalt is assumed to con- 
tinue increasing, but the rate is not expected to remain at 
the high level calculated in the trend. The" calculated cobalt 
consumption for transportation in 1993 at 0.156 intensity 
of use is 9.6 million lb, an annual grow^th rate of 6.5%, or 
twice as fast as the transportation industry's projected 
growd;h by Chase Econometrics. Given possible future 
substitutions, an intensity of use of 0.129, the 1983 estimate, 
is therefore substituted for the forecast period, and this 
results in estimates for the 1987 and 1993 transportation 
demands for cobalt, of approximately 7 million and 8 million 
lb, respectively. 

COPPER 

Copper" and its alloys, bronze and brass, have been im- 
portant materials in the development of civilization for 
thousands of years. Copper has grown from early use in tools 
and weapons to today's extensive use in electrical products. 
It is present in every structtire and every vehicle and used 
in nearly every industry in the economy. Copper, steel, and 
aluminum are the most ubiquitous metals in worldwide 
manufacturing. The United States remains the largest con- 



"Fortune. Cutting Dependence on Strategic Metals. V. 112, No. 2, July 
22, 1985, p. 69. 

"Consumption of domestic reported refined copper was based on data from 
the U.S. Bureau of the Census, the Copper Development Association, the 
Census of Current Industry, and estimates that included only scrap used 
to produce refined copper. Source: U.S. Bureau of Mines. Minerals Year- 
book, various years Chapter on Copper. 



14 



Table 5.— Copper intensity of use and consumption 

Actual Forecast 

Industry^ 

\ 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND SHORT TONS 

PER MILLION 1977 DOLLARS 

Heavy construction 0.006 0.007 0.009 0.010 

General construction 005 .007 .008 .009 

Air conditioning and heating 013 .010 .009 .008 

equipment 

Household appliances 010 .009 .008 .007 

Motor vehicle parts and 

accessories 005 .005 .005 .005 

CONSUMPTION, THOUSAND SHORT TONS 

Heavy construction 590 512 *627 *696 

General construction 555 456 *581 *643 

Air conditioning and heating Ill 80 102 102 

equipment 

Household appliances 90 77 96 107 

Motor vehicle parts and 

accessories 178 138 *175 "191 

All other industries 714 566 630 599 

Total 2,238 1,829 2.211 2,338 

'These industries accounted for 69% of total copper consumption in 1982. 
'Subjective value selected over regression value. 



sumer of copper and until recently was copper's largest pro- 
ducer. Domestic uses are primarily associated with elec- 
trical applications (table 5). 

Copper intensity of use and consumption were 
calculated and projected for 32 industries, 5 of which are 
listed in table 5. These five represent 68.1% of total con- 
sumption in 1972 and 69% in 1982. Of the remaining 27 
end uses of copper, shown in the table as "Other," 5 exhibit 
modestly increasing intensity of use. 

During the 1970's the intensity of copper use experi- 
enced a broad-based and significant decline. Estimates of 
this decline vary depending on methodology. DOC, in a 1983 
study", reported that the ratio of copper consumption to con- 
stant dollar shipments declined in 58 of 77 copper end-using 
industries from 1972-80. The reasons for copper's decline 
are varied but have generally been attributed to automotive 
and products downsizing, design changes to conserve 
materials or increase efficiency, and substitution primar- 
ily by aluminum. 

Although the decline in intensity is not expected to con- 
tinue at the same rate as in the 1970's, and could in fact 
be offset by gains in some areas, the future for copper de- 
mand is at best mixed. During the next several years it is 
likely that copper use will decline in two major markets: 
Aluminum will increasingly replace copper in automotive 
radiators, and fiber optics will erode copper's telecom- 
munications markets. The growth in copper tonnage con- 
sumed, therefore, will become increasingly dependent on 
the growth and the production of its end-use products; i.e., 
less copper per unit but more units produced. Such a situa- 
tion would make copper increasingly vulnerable to economic 
downturns and recessions, which would cause a sharp drop 
in major end-use production. 

Construction (SIC 1500, 1600, 1700) 

Although copper intensity of use grew in the construc- 
tion industry during the historical period, its consumption 
declined. The reason for this was that construction output 
was greatly reduced during the recession. Copper intensity 
of use in the construction industry has moved primarily 
with the economy at large, but with some interesting ex- 
ceptions. In 1974 both the construction output and copper 



"U.S. Department of Commerce. Market Trends and Forecasts for Selected 
Strategic Metals. BIE-SP83-2, Apr. 1983, p. 14. 



used in construction (intensity) started an enormous 
downward slide as a function of the OPEC action, and both 
hit bottom in 1975. Afterwards copper recovered faster than 
the construction industry, as indicated by the increasing 
intensity of use. Copper continued its upward trend until 
the effects of the second OPEC action brought it back down 
in 1979, while the construction industry fluctuated 
throughout the period. Copper intensity of use in heavy con- 
struction declined 19% and in general construction 22% in 
1975, but within 2 yr each had reached a peak higher than 
before the energy price increases. Again, in 1981, a recovery 
started, but the recession stifled it; and in 1983, even though 
consumption was again increasing, intensity was still 
declining. The overall effect, however, is an increasing trend 
due to the remarkable strength of the 1976-78 rebound. 

Since the trend is too dramatic to be realistic for longer 
periods, the intensities shown in table 5 were not used to 
calculate the projections. Instead, the actual intensities for 
1983 are assumed to continue throughout the forecast 
period, and construction use of copper is estimated to grow 
with the expected growth of construction, which Chase 
Econometrics forecast at 2.88%/yr. The following 
paragraphs discuss the individual uses and expected growth 
of copper in construction. 

For convenience, copper usage in the three broad types 
of construction activity covered under SIC groups 1500, 
1600, and 1700 is aggregated into two industrial uses, with 
SIC 1500 allocated to SIC 1600 and SIC 1700. The first 
group, SIC 1600, called heavy construction, relates to re- 
fined copper consumed in making wire, sheet, and tube for 
use in heavy construction such as electrical and communica- 
tion transmission lines, railroads, street maintenance, 
marine construction, and other construction except 
buildings. The second group, SIC 1700, called general con- 
struction, includes all copper used in work done by special 
trade contractors and includes copper used in plumbing, 
heating, air conditioning, roofing, and electrical work done 
at the site. Copper and copper alloys are used extensively 
in all of these groups for electric power production and 
transport, communications wire and connectors, water car- 
rying and spinkler systems, central air conditioning equip- 
ment, heating systems, roofing, and many special uses such 
as in desalinization plants. More than 50% of the annual 
refined copper is in response to the growing needs of the 
construction industries. 

Since most of the meu-kets served by the wire industry 
fluctuate with the business cycle and are highly sensitive 
to interest rate changes affecting the construction industry, 
virtually every wire and cable end-use market experienced 
a decline from 1979 through 1982 associated with the rise 
of interest rates during that period. Since 1982, however, 
both residential and nonresidential building activity started 
expanding. This is assumed to continue through the forecast 
period. New residential construction is a major source of 
building wire demand, accounting for nearly 20% of in- 
sulated wire demand. 

The demand for high-voltage power wire and cable cor- 
responds to the Nation's demand for electric energy, and 
to a large extent to the growth of the utility sector providing 
that energy. After the two large oil price increases and as 
many recessions, growth in electric energy generation con- 
tracted from its 7.5% annual growth rate in the 1960's to 
a 2.2% rate in 1982. The long-term outlook, however, is for 
growth in electric energy generation to pick up through the 
remainder of the 1980's, although at a slower pace than in 
the last decade. 



15 



The communication wire market is expected to remain 
competitive and, among electrical uses, provide one of the 
best opportunities for growth because of the large customer 
base it serves. Cable television subscriptions have grown 
13.1%/yr since 1970, and the industry now purchases about 
$250 million worth of flexible and semiflexible coaxial cable 
annually. Some of the more optimistic forecasts have 
estimated that this wire market will triple over the next 
5 yr as large metropolitan areas bring their systems into 
service. Copper will compete with aluminum and ultimately 
fiber optics in this use and in other electrical and com- 
munication uses. 

Copper and copper alloy materials produced in the 
United States for use in the construction industry in 1983 
experienced significant increases over 1982 production, 
reflecting the rebound of the economy and the successful 
penetration by copper into market segments enjoyed by com- 
peting materials. While aluminum has made considerable 
impact on the high- voltage power wire market, copper has 
reestablished its competitive position in the building wire 
and transformer wire markets. Although the price of op- 
tical fiber has fallen in recent years, its price means that 
it currently can be cost efficient only when used in high- 
signal-density areas such as long-distance and interoffice 
trunking applications. Use in subscriber loop area remains 
to a large degree uneconomic at this time. 

Although continued import penetration is expected, a 
revival in some important markets such as large-diameter 
tubing and roofing is expected to continue. Fire sprinkler 
systems for hotels, hospitals, apartments, and nursing 
homes have been increasing; copper systems are easier to 
install and are of better quality than alternatives, and are 
therefore preferred in this use. A new Ni-Cr-Cu alloy with 
good erosion-corrosion resistance at high-flow velocities is 
competing with stainless steel and titanium tubing in elec- 
tric powerplants. The use of large-diameter copper tube for 
water supply systems in commercial building is also an ap- 
plication for copper plumbing that is expected to grow. Cop- 
per is recognized as a potential solution for preventing cor- 
rosion and scaling and is gaining ground in this area 
because of these qualities. 

Other volume uses expected to expand are the roofing 
market, comprised of shingles for houses, motels, and in- 
dustrial buildings, and sheet roofing for high-rise and other 
commercial buildings. This market increased in the United 
States by about 20% in 1983. Some advantages of copper 
roofing are ease of installation, durability, little or no 
maintenance, and resistance to wide temperatvire variations 
and heavy snow covers. Changes in architecture towards 
steep roofs are also a factor promoting the increased use 
of copper for roofing. 

Total demand for copper and copper alloy materials used 
in construction in the United States is forecast to grow at 
a rate parallel to the grow^th in the U.S. construction in- 
dustry, but with two possible departures. First, the copper 
consumed by U.S. semifabricators and destined for this 
economic sector will deviate from the expected use as a 
result of continued increases in imported semimanufactured 
and manufactured items. The Copper Development Associa- 
tion reports copper metal shipments (including imports) to 
the building construction market increased by 13.8% from 
1983 to 1984, and total construction increased by 18.1%. 
The second possible departure is the assumed steady inten- 
sity, which results in an understatement of copper consump- 
tion and could be in error. It could continue to grow, both 
in the traditional uses and in some new ones, given the 
popularity of different electronic gadgets, additional 



telephones, solar panels, and sprinkler systems— all of 
which bring higher copper intensity of use in construction. 
To the extent these uses expand and are not replaced by 
imports, the construction forecast is underestimated. 

Air Conditioning and Heating Equipment (SIC 3585) 

The use of copper in this market has been declining for 
the past decade, partly as a result of the oil crises of the 
early and late 1970's. (See table 5 and figure 7.) The decline 
in copper intensity appears to be the most pronounced dur- 
ing the late 1970's, as higher energy costs caused consumers 
to demand more energy efficient products. Improved con- 
sumer energy awareness and insulation allowed for the in- 
stallation of smaller units. In addition, the general down- 
sizing and miniaturization of products, along with some 
substitution, caused copper use to decline. The intensity of 
copper use in this demand sector is expected to continue 
to decline slightly during the next several years; this 
decline, however, will be far less pronounced than that 
which occurred during the 1975-80 period. 

The tonnage of copper use by this market also declined 
(table 5), on average, during the last decade. The tonnage 
decline, however, was more a function of the overall 
economy and construction activity than of a decline in cop- 
per intensity. The recessions of 1975, 1980, and 1982 had 
a serious negative effect on building activity and copper con- 
sumption. During the next decade the air conditioning and 
heating market is expected to undergo study expansion. 
This expansion will cause the tonnage of copper consumed 
in this market to regain some ground lost during the 1970's. 

Household Appliances (SIC 3630) 

Copper intensity of use in many appliances has been 
reduced during the past 10 yr as a result of downsizing, 



o.oi3r 



(/) 


(0 


.012 


7 


< 




o 


—1 




1- 


o 
n 


.011 


rr 






O 






T 


O) 




OT 




.010 


n 


z 




z 


O 




< 

(0 


—1 
-J 


.009 



.008- 



.007 



^ 


'v,^ 


4, Intensity 




H, 


<\ . 


■ 




^^A 






Actual"' ^^ forecast 








1 


1 1 1 


1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 J 



1983 



B, Consumption 



1993 




Forecast^^ ^ _^ .» _^ ^ _^ 



1972 



1983 



1993 



Figure 7.— Copper intensity of use and consumption in air con- 
ditioning and heating equipment, 1972-93. 



16 



design changes, and substitution. This overall reduction has 
been tempered by an increase in electronic components and 
controls during the last few years. In any case, the use of 
copper per unit has declined since 1970, and this decline 
is expected to continue during the next several years but 
at a reduced rate. The expected reduction should result 
primarily from continued downsizing and substitution but 
again will be tempered by an increase in electronic controls. 
Although intensity has declined, the tonnage of copper 
used in appliance applications has shown uneven growth 
during the past 10 yr, due in general to the growth in ap- 
pliance demand during nonrecessionary years. New ap- 
pliances, and the miniaturization and new design of many 
traditional appliances, coupled with an increasing use of 
electronic controls and a trend to replace rather than repair, 
seem to have stimulated appliance demand and increased 
the number of appliances per household. The demand for 
household appliances should undergo a strong expansion 
during the next decade, causing copper tonnage used in this 
market sector to rise. 



Motor Vehicle Parts and Accessories (SIC 3710) 

The automotive industry is a major user of copper, 
mainly in radiators, wiring harnesses, electrical and elec- 
tronic equipment, and accessories. Copper consumption by 
the industry underwent significant changes during the 
1970's, in terms of both intensity of use and product mix. 
The intensity estimate is constant, but the regression is poor 
and reflects a great deal of variation over the time span. 

The oil crisis of the early 1970's had a profound effect 
on the intensity of copper use, as automotive manufacturers 
redesigned and downsized their fleets. Government- 
mandated mileage requirements directly contributed to 
vehicle weight reductions. Copper use per vehicle dropped 
during the eairly downsizing stages; most of this decline was 
due to the smaller radiators required for four- and six- 
cylinder engines. Smaller cars also use shorter cables and 
wires, and therefore, less copper. The downward trend in 
copper use abated in the early 1980's as an increase in 
automotive electrical and electronic applications offset 
declines. During this period consumers increasingly 
demanded vehicles with options such as stereo systems, elec- 
tric seats, windows, and defoggers. 

Despite an anticipated increase in automotive elec- 
tronics, the intensity of copper use per vehicle is expected 
to decline slightly during the next several years. The 
substitution of aluminum for copper in radiators will result 
in this decline. In 1985 Ford replaced copper radiators with 
aluminum in at least eight models; General Motors uses 
aluminum in its Fiero, Corvette, and Firebird models. It is 
likely that by the 1987 model year, 50% of the automotive 
radiator market will consist of aluminum radiators. 

The future for copper consumption by the automotive 
sector appears somewhat brighter when considered in terms 
of tonnage. Domestic motor vehicle production appears to 
have bottomed during the 1982-83 recession and has since 
experienced a healthy recovery. Domestic motor vehicle pro- 
duction should experience study growth through the early 
1990's. This grovi^h will be enhanced by increased domestic 
production of foreign-designed automobiles. The overall in- 
crease in vehicle production should cause copper consump- 
tion to regain most of the tonnage losses experienced dur- 
ing the 1970-80 period. 



Table 6.— Lead intensity of use and consumption 

Actual Forecast 

Industry' 

[ 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND SHORT TONS 

PER MILLION 1977 DOLLARS 

Batteries 0.51 0.44 0.42 0.38 

Gasoline additives 008 .003 

Construction; Total 0008 .0006 .0005 .0005 

General 0003 .0002 .0002 .0002 

Heavy 0005 .0004 .0003 .0003 

Ammunition 13 .09 .07 .04 

Pigments 0028 .0018 .0013 .0007 

CONSUMPTION. THOUSAND SHORT TONS ~ 

Batteries 726.6 776.4 959.0 1,034.0 

Gasoline additives 279.1 131.4 

Construction, total 78 40.5 47.0 40.0 

Ammunition 84.7 48.8 62.0 38.0 

Pigments 89.2 67.1 71.0 47.0 

Other 227.7 121.2 90.9 80.1 

Total 1,485.3 1,185.4 1,229.9 1,239.1 

'These industries accounted for 90% of total lead consumption in 1982. 

LEAD 

From 1972 to 1982 total U.S. lead consumption'' de- 
clined at a compound annual rate of 1.9%, from 1.5 million 
to 1.2 million st (table 6). Similarly, there has been a decline 
in lead intensity of use for all but 3 of the 31 lead end-use 
sectors tested. Lead's intensity of use has declined because 
of advances in technology, Government regulations in the 
form of environmental and workplace standards, and 
substitution of less hazardous or more economic materials. 

For the 1983-93 period, total annual domestic lead con- 
sumption is projected to remain at about 1.2 million st. The 
battery industry, by far the largest lead consumer (65% of 
consumption), is forecast to grow significantly. However, 
this growth will be offset by declines in other consuming 
industries, especially the production of tetraethyl lead 
discussed under gasoline additives, the second largest use 
in 1972 to 1983 (18% of consumption). Other important con- 
suming sectors are pigments, anmiunition, construction,and 
the electrical and metalworking industries. 

An important factor holding down primary lead con- 
sumption is increasing lead recycling. It is anticipated that 
55% of total U.S. demand could be met from metal recovered 
from old scrap compared with 45% now. Such recovery will 
be made possible by less dissipative uses; i.e., uses in which 
lead is dispersed throughout the environment and thus 
essentially "lost." For example, there will be virtually no 
tetraethyl lead production, a use where lead cannot be 
recovered. By contrast, almost all lead from batteries can 
be recovered. 

Batteries (SIC 3691) 

The battery industry, the largest end use of lead, in- 
creased to over 70% of lead consumption in 1983, about 
890,000 St. The major end-use markets for lead-acid bat- 
teries are (1) automotive starting-lighting-ignition (SLI) 
systems; (2) uninterrupted power supply (UPS) systems for 
hospitals, computers, and banks; (3) conventional standby 
emergency telecommunications and lighting systems; and 
(4) electromotive traction batteries for electric vehicles 
(EV's). Technological improvements in battery design and 
the downsizing of automobile batteries have resulted in a 



"Total U.S. consumption of primary and secondary lead, including scrap. 
Distribution to end uses based upon BOM end-use lead data and industry 
judgments. BOM reports lead in metric rather than short tons. Sources: U.S. 
Bureau of Mines. Minerals Yearbook, various years. Chapter on Lead. U.S. 
International Trade Administration (DOC). 



17 



0.6 



z < 



o z 

< s 

O 5 



4 , Intensity 



. Actual 




Forecast 



3 > I I LJ l_J I I I LJ L_L 

1972 1983 



J L 



I I I 1_J 

1993 



1,100 



8, Consumption 
Forecast 




Figure 8. — Lead intensity of use and consumption in storage 
batteries, 1972-93. 

steady decline in lead intensity of use of 14% from 1972 to 
1982. This decline in intensity of use is projected to con- 
tinue through 1993. (See table 6 and figure 8A.) 

However, output in the battery industry is projected to 
increase rapidly in the forecast period, producing a signifi- 
cant increase in lead consumption in this important market 
by 1993. (See table 6 and figure 8B.) The forecast of 1 million 
st of lead consumed by the battery industry in 1993 could 
be conservative, if the industrial-traction sector attains a 
growth rate of 10%/yr. This growth rate is a possibility, con- 
sidering that substitution for lead-acid batteries in conven- 
tional end-uses appears unlikely during this century and 
that additional demands for very large load-leveling bat- 
teries by both utility networks and customers, such as public 
mass transit systems, is likely. The market for automotive 
batteries is expected to grow 3%/yr in this period. Under 
these circumstances, total U.S. lead consumption could 
reach 1.4 million st in 1993 if electric passenger cars are 
commercially developed. 

Gasoline Additives (SIC 2869) 

The intensity of use of lead in the tetraethyl lead (TEL) 
industry, part of SIC 2869, has declined more than 50% 
since 1972. Laws regulating the amount of lead permitted 
per gallon of leaded gasoline have caused this decline. 

In March 1985, the Environmental Protection Agency 
(EPA) issued its final ruling on the lead content of gasoline. 
This ruling reduces the amount of lead permitted per gallon 
of gasoline to 0.1 g as of January 1, 1986. This standard 
represents a 90% reduction from the previous standard of 
1.1 g, substantially reducing the amount of lead consumed 
in TEL in the future. A total ban on lead in gas is also likely 
for 1988. A ban on leaded gasoline is not a new idea, nor 
would it be limited to the United States. Many European 



countries have expressed a desire to reduce or eliminate lead 
in gas by the end of this decade. Since up to 50% of U.S. 
TEL production is exported, future world demand for the 
product is uncertain and continued decline in TEL inten- 
sity of use is expected. TEL consumption could reach zero 
in this country by 1990. 

General and Heavy Construction (SIC 1520, 1540) 

Consumption of lead in the construction sector 
represented the fifth largest end use of lead in the United 
States in 1982. The intensity of use for lead in this sector 
also has declined 25% from 1972 to 1982. This long-term 
decline in lead use was due to substitution of less expen- 
sive, lighter, and less hazardous materials. The use of lead 
in roofing, flashing, piping, and caulking has declined in 
general and heavy construction as the use of plastics, 
aluminum, and steel has grown. 

The rapid decline of lead use in the estimation period has 
slowed somewhat in the early 1980's. The compounded an- 
nual rate of 6.8% decline has now dropped to a much lower 
rate, about 2.7%/yr. In fact, lead use in the construction in- 
dustry could rise in the future if the lead industry can over- 
come the general public's concern about lead in the environ- 
ment. Significant market potential exists in new uses, such 
as for a stabilizing agent in asphalt roofing shingles and 
plastic pipe and other shapes. In addition, traditional uses 
of lead, such as in lead sheet for use in sound barriers and 
radiation protection, and lead and plastic laminates for 
cablesheathing, could see a resurgence in demand in the 
future. 

Ammunition (SIC 3482) 

Liead used in small arms ammunition represents the 
fourth largest end-use sector in 1982. As with most other 
sectors, the intensity of use for lead in this sector has de- 
clined (5.7% compounded annually) over the past 10 yr. Lead 
in this sector is used for sporting ammunition in the form 
of shot and small-caliber bullets; there is little use of the 
metal in military ordnance today. Lead shot used in radia- 
tion shielding applications, such as double-annulus pipe at 
nuclear reactors, is also included in this sector. 

Lead intensity of use is projected to continue its long- 
term downtrend. Lead consumption for this sector is pro- 
jected to rise modestly and then fall through the early 
1990's. A reversal of this trend will be contingent upon the 
growth of radiation shielding applications, which could 
prove substantial with revived nuclear reactor construction 
and renewed interest in firearms. 

Pigments (SIC 2816) 

This generalized end-use category includes all paints, 
pigments, glass and ceramic products, and chemicals such 
as "chrome yellow" (lead chromate) derived from lead ox- 
ides. It does not include battery oxides or chemicals from 
metallic lead, such as gasoline additives or lead 
diamyldithiocarbamate, an antioxidant for asphalt. The 
specific uses within this general category have changed 
more drastically over the last two decades than those within 
any of the other categories due to the growing demand for 
"TV glass" (picture tubes and cover plates) and the elimina- 
tion of lead-based indoor paints. For instance, in 1983 the 
use of lead oxide for TV glass represented about 40% of this 
category, and red lead oxide for undercoat or anticorrosion 
protective paints about 25%. The projection of consumption 



18 



in 1993 is 47,000 st. However, if a major highway and bridge 
rebuilding scenario occurs, and the shipbuilding industry 
is revitalized, demand could easily reach 84,000 st in that 
year, assuming continuing growth of conventional TV 
technology. The projection for 1993 of 47,000 st total de- 
mand could occur if lead anticorrosive uses were substan- 
tially replaced and light-emitting diode or liquid crystal 
technology were substantially utilized in the TV industry. 
Lead intensity of use is expected to continue to decline in 
the 1983-93 period. 



MANGANESE 

As in other industrialized countries, a high proportion 
of domestic manganese demand'^ is determined by re- 
quirements in steelmaking. The trend in steel's consump- 
tion of manganese is toward lower use owing to more effi- 
cient operations, such as determining the manganese 
content by computer. A lower manganese requirement also 
occurs when sulfur has been removed first. Manganese in- 
tensity in steel sectors dropped by about half between 1972 
and 1982, and total consumption dropped 50.8% (table 7). 
The process of decreasing manganese use in steel is not 
quite complete but will not continue much longer. The 
strong intensity of use regression trends in the analysis are 
assumed to continue only until 1987 in the steel end uses, 
after which the trend is interrupted and constant intensities 
are assumed to hold. 

The manganese content varies in steels according to 
grade, but in most instances does not exceed 2%. The steel 
production mix variations in steel chemistries can be 
disregarded in estimating manganese use in steel-related 
end-use categories. Thus, to a first approximation, the 
allocation of manganese demand can be made solely on the 
basis of steel demand as developed by the Bureau from com- 
pilation of shipments tonnages by the American Iron and 
Steel Institute. 

The three most important steel-manganese end-use sec- 
tors by percentages in 1982 are construction at 42.2%; 
transportation at 32.4%; and machinery at 25.4%. 

The most significant development affecting these steel- 
manganese demand sectors during 1972-82 was a decline 
in relative importance of the transportation sector, which 
in 1972 was the highest use, at 37%. Automobile downsiz- 
ing was an important cause of an appreciable decrease in 
consumption by the transportation sector. Not only was 
there a reduction in the sheer bulk of cars, but steel was 
used more efficiently in certain applications by use of higher 
strength steels. The trend to a lower absolute quantity of 
steel-manganese demand for the transportation sector 
resulted in displacement of transportation by construction 
as the leading manganese end-use sector. Demand by the 
construction sector was comparatively stable as a nearly 
constant fraction of total steel demand exclusive of transpor- 
tation. The relative importance of demand by the machinery 
sector diminished slightly, by only 1%, toward the end of 
the 1972-82 interval because of increased imports of 
machinery and weak markets, particularly for agricultural 
machinery. 

The sector labeled "Other" in the tables comprises six 
other uses: cans and containers, appliances and equipment, 



"Total U.S. primarj' demand. For this study 80% of the "Other" category 
is distributed proportionately to construction, transportation, machinery, 
cans and containers, appliances, and oil and gas industries. Source: Jones, 
T. S. Manganese. Ch. in Mineral Facts and Problems, 1985 Edition. BuMines 
B 675, 1985, pp. 483-498. 



Table 7. — Manganese intensity of use and consumption 

, , Actual^ Forecast 

Industryi 

[ 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND SHORT TONS 

PER MILLION 1977 DOLLARS 

Transportation 0.0031 0.0015 0.0010 "0.0007 

Construction 0024 .0015 .0012 .0005 

Machinery 0023 .0008 '.0004 *.0004 

CONSUMPTION, THOUSAND SHORT TONS 

Transportation 359 149 140 *108 

Construction 356 194 196 *152 

Machinery 255 117 '90 '117 

Other 399 213 *204 '172 

Total 1 ,369 673 630 549 

'These industries accounted for 68% of total manganese consumption in 
1982. 

^Actual numbers may differ from source because of redistribution and in- 
dependent rounding of numbers. 
'Subjective value selected over regression value. 



0.004 



z < 

o fc 

5? 

Q Z 

Z O 

o s 

X cc 



.003 



.002 



.001 - 



Actual 




A, Intensity 



Forecast 



_LJ I I I I i 



JLJ i i I 



2t 



I T^l 



1972 



500 r 



19B3 



1993 



. Actual 



8, Consumption 




1972 



1983 



1993 



Figure 9.— {Manganese intensity of use and consumption in the 
transportation industry, 1972-93. 

oil and gas industries, chemicals, batteries, and as a 
residual. The statistical significance of manganese trends, 
except for oil and gas industries and batteries, was unusu- 
ally high, exhibiting strong downward trends with low er- 
ror terms. Even so, the forecasts were not uniformly ac- 
cepted by the specialists. In some cases, the decline was 
caused by an event that had run its course, such as the ef- 
ficiency change in steelmaking. Future intensities were 
therefore adjusted to a more realistic level. In other cases, 
the downward slope was considered to take into account 
future events not built into the equation, and the consump- 
tion decline was allowed to stand. Such a case is chemicals, 
in which manganese use as an oxidant by Tennessee 
Eastman will be discontinued in 1986. 

Figure 9A shows the extreme negative slope of 
manganese intensity of use in transportation, and figure 
9B the expected downward path of manganese consumption 
derived from that intensity. Both reflect the dilemma of 



19 



separating mathematical and other professional judgments. 
The regression equation has excellent statistical properties, 
an R-square value of 0.85; however, it does not account for 
future events— for example, when the process of decreasing 
manganese in steel will be completed— or for other outside 
events that will interrupt the smooth downward projections. 
In the judgment of mineral experts, future events will 
modify the decline during the forecast period, as the slight 
upturn in 1983 indicates. This is the theory behind changes 
made to the 1993 projections of all tabled values. 

Transportation (SIC 3700) 

Intensity of use in the transportation industry decreased 
by half from 1972 to 1982 and is forecast to continue to 
decrease to 1993. However, the Bureau's commodity 
specialist advises that further substitution is limited, since 
production efficiency is nearly completed. The 1989 inten- 
sity of use of 0.0007 was taken as a limit and was 
substituted for the calculated value of 0.00002. The replace- 
ment intensity changes the manganese consumption in 
1993 from 3,000 st to 108,000 st. (See figure 9fi.) A most 
significant development affecting the steel-manganese de- 
mand sectors during the period was a decline in growi;h of 
the transportation sector. The industry output in constant 
dollars moved erratically during the 1972-82 estimation 
period, decreasing and increasing equally often. Between 
1982 and 1993 the transportation sector is projected to grow 
4.1%/yr, bringing up steel-manganese growth commen- 
surately. 

Construction (SIC 1500, 1600, 3440) 



0.003 



M 
z < 

2 Zi .002 

o t 
o z 

o s 

I- lu 



.001 



Actual 




A, Intensity 



Forecast 



-.001 1 I'll I l_J I I I I I I \ L_l I I I I I 

1972 1983 1993 



400 
M 300 



200 



100 



-100- 



Actual 



^ 



6, Consumption 



Forecast 



X 



-200 
1972 



_l_l I \ 1_J I l__l LJ I L 



X 



J 1 I I l_l 



1983 



1993 



Figure 10.— Manganese intensity of use and consumption' in 
machinery, 1972-93. 



The declining consumption and intensity of use of 
manganese in the construction sector are projected to con- 
tinue to 1993. The ratio in 1982 is 0.0015, declining to 
0.0012 in 1987 and to 0.0005 in 1993. Use of new construc- 
tion materials, replacing steel and higher strength steels 
of increasing efficiency, is assumed to continue; however, 
the trend should bottom out earlier than the projection in- 
dicates, leaving the regression estimate correct for 1987 but 
low for 1993. The value in table 7 was calculated at nearly 
100,000 st for construction but has been changed to the 1990 
level of approximately 150,000 st, as it is not expected to 
fall beneath that low level. 

Machinery (SIC 3500, 3610, 3620) 

The ratio of manganese consiunption to output value 
of the machinery industry decreased about 5% each year 
from 1972 (0.0023) to 1982 (0,0008) and is forecast to con- 
tinue its downward slope. This long-term decline in inten- 
sity is attributed to more efficient production processes in 
steelmaking, which is expected to change less in the forecast 
period than calculated. The intensities of 0.0003 in 1987 
and in 1993 were therefore adjusted to a constant ratio 
of 0.0004 (fig. lOA), which is the 1986 ratio. As a result, 
machinery consumption of manganese will not reach zero, 
as forecast in 1993. (See figure lOS.) Instead, machinery 
consumption is estimated at 90,000 st for 1987 based on the 
adjusted intensity and at 117,000 st for 1993. 



NICKEL 

Nickel is used primarily as a steel-alloying additive to 
improve strength and resistance to wear and corrosion. The 



Table 8. — Nickel intensity of use and consumption 

, , Actual Forecast 

Industry' 

[ 1972 1982 1987 1993 

INTENSITY OF USE, SHORT TONS 

PER MILLION 1977 DOLLARS 

Fabricated metal products . 0.81 0.53 0.46 0.29 

Construction 290 .087 •.087 '.087 

Chemical and allied 

products 050 .031 .021 •.021 

Machinery except electrical .260 .130 .091 .011 
Electric and electronic 

equipment 234 .098 .022 *.022 

Transportation 177 .142 .174 .171 

CONSUMPTION, SHORT TONS 

Fabricated metal products . 66,309 42,427 49,012 36,608 

Construction 5,483 3,232 •3,731 ^4,291 

Chemical and allied 

products 4,878 3,794 3,238 ^3,810 

Machinery except electrical 25,112 16,046 16,806 *16,806 
Electric and electronic 

equipment 16,539 9,596 ^9,596 *9,596 

Transportation 23,773 17,316 •28,513 *31,759 

Other 16,206 11,570 18,819 19,439 

Total 158,300 103,981 129,813 122,309 

'These industries accounted for 89% of total nickel consumption in 1982. 
'Subjective value selected over regression value. 



domestic steel industry uses nearly half (45%) of the U.S. 
primary nickel requirements. About 80% of this amount is 
used to produce stainless and heat-resisting steel, the 
balance to produce alloy steel. Domestic stainless steel pro- 
duction is approximately 70% nickel-bearing. Historically, 
about 40% of domestic primary nickel consumption is in con- 
sumer durables (cars, refrigerators, and other household ap- 
pliances), and the remainder is in capital goods (commer- 
cial and industrial buildings, and industrial machinery and 
equipment). 



20 



Nickel consumption" and intensity of use were cal- 
culated and projected for 21 end uses, of which 6 are shown 
in table 8. These six end uses (fabricated plate work, con- 
tract construction, chemical and allied products, machinery, 
electrical and electronic equipment, and transportation) con- 
sumed 90% of the 1972 consumption total and 89% of the 
1982 consumption total. Substitution and imports were 
major contributors to a 41% decline in domestic nickel re- 
quirements for the construction industry between 1972 and 
1982. Intensity of use declined even further (70%) indicating 
structural changes in its use as opposed to recession 
declines. 

From 1972 to 1982, the average rate of consumption 
decrease was 0.43%, while intensity of use decreased for 16 
of the 20 end uses. Substitution and imports were major 
contributors to this decline in nickel requirements. 

Fabricated Metal Products (SIC 3400) 

Fabricated metal products includes end-use items such 
as shipping containers, cutlery, plumbing fixtures and fit- 
tings, plating, boilers and duct work, and other fabricated 
metal used in commercial and institutional kitchens, 
hospitals, dairies, and chemical processing plants. Within 
the fabricated metal products group, plating has been a 
significant nickel end-use area. 

Nickel-plated plumbing fixtures and fittings and auto- 
mobile bumpers and side trim were once large nickel end- 
use ju-eas. Diu-ing the 1970's, however, less costly and 
lighter weight substitutes such as plastic and aluminum 
displaced much of the domestic nickel demand requirements 
of these end-use areas. Initially, the switch to less costly 
plastic plumbing fixtures and fittings and rising automobile 
imports began to reduce domestic nickel demand for these 
plating applications. However, the reduction became more 
dramatic as domestic auto makers began downsizing their 
cars and switching to lighter weight materials such as 
plastics and aluminum for bumpers and side trim in order 
to achieve better fuel efficiency and compete with the ris- 
ing auto import trend. Nickel plating in plumbing and 
automobiles has matiu-ed and is not expected to exert as 
strong an influence on the future domestic demand re- 
quirements. However, one potential area for nickel plating 
growth is in steel cans. 

Imports of stainless steel, particularly flat rolled, have 
also precipitated a decline in domestic nickel demand for 
use by the fabricated metals industry in producing cutlery 
and other equipment for use in commercial and institutional 
kitchens, hospitals, dairies, and chemical processing plants. 
However, this trend is expected to turn around as import 
quotas on stainless steel mill products allow the domestic 
industry to maintain some market share and profitability. 

Contract Construction (SIC 1500, 1600, 1700) 

Nickel is used in contract construction principally in two 
forms, alloy steel and stainless steel. Nickel-bearing alloy 
steel in structural shapes is used as support frames for 
storage tanks and bridges, and for the internal structure 
of some commercial and industrial buildings. Nickel- 
bearing stainless steel is used in construction for siding on 



building exteriors, outdoor and indoor stair railings, win- 
dow frames, and for other corrosion-resistant decorative 
purposes. 

The increased use of cement in the place of alloy steel 
in construction of bridges and multistory buildings has 
reduced the nickel demand requirements in those uses. In 
addition, lower priced imported stainless mill and fabricated 
intermediate metal products, for use in the interior and ex- 
terior designs of commercial and institutional buildings, 
have also contributed to the downward trend in domestic 
nickel requirements by the contract construction industry. 
While the influence of stainless imports is expected to 
decline, as productivity and competitiveness of the domestic 
steel industry increase, the substitution of cement is ex- 
pected to continue, as savings result in building time when 
using precast versus in situ steel-reinforced cement. The 
commodity specialists have projected a continuation of the 
1982 intensity of use estimate, although the intensity of 
use regression equation projects zero in 1985 and forward 
with statistical significance. 

Chemical and Allied Products (SIC 2800) 

End uses in this group include nickel as a catalyst in 
the hydrogeneration of edible fats and oils and as a mor- 
dant to fix dyes to fabrics. Domestic primary nickel demand 
has declined from 4,878 st in 1972 to 3,794 st in 1982 in 
each of these areas for various reasons. These reasons in- 
clude changes in consumer tastes, technological develop- 
ment, and imports of finished products. 

The downward trend of nickel consumption by the 
domestic chemical industry for the hydrogeneration of edi- 
ble fats and oils has been caused by the joint influence of 
a change in consumer tastes from fatty and high-cholesterol 
foods to low-fat and low-cholesterol foods (where nickel- 
based catalysts are not used), and developments that allow 
for the recycling of the catalysts used in the hydrogenera- 
tion process. 

The decline in nickel used as a mordant is the result 
of rising textile and apparel imports. The rising import 
levels have reduced the domestic industry's market share 
and associated production levels, thereby also reducing the 
raw material requirements. 

While the downward demand trend is expected to con- 
tinue in the hydrogeneration catalyst area, it is not expected 
to continue in the mordant area. Extension of apparel im- 
port limitations, enacted in the late 1970's and extended 
in the early 1980's, will tend to allow the domestic textile 
and apparel industries to retain market share and improve 
productivity through increased investment in the moder- 
nization of operations and other capital improvements, 
thereby increasing domestic requirement for nickel-based 
mordants. 

The intensity of use in the chemical industry trended 
to an extremely low level in 1993 (0.008), which results in 
a consximption level of only 1,610 st for that year. This was 
rejected by the nickel specialists, who used the 1987 inten- 
sity of use of 0.021 for 1993, which results in a nickel ton- 
nage of 3,810 st for consumption that year. 

Machinery (Except Electrical) (SIC 3500) 



"Primary reported consumption (excludes scrap) of domestic use of con- 
tained nickel. Distribution of data based upon BOM end-use data, Census 
of Manufacturers Shipment Report, industry estimates, and analyst's judg- 
ment. Sources: U.S. Bureau of Mines. Minerals Yearbook, various years. 
Chapter on Nickel. U.S. International Trade Administration (DOC). 



The intensity of use for nickel consumed in this industr>- 
dropped 50% between 1972 and 1982, a stronger decrease 
than that for tonnage (36%). (See figure ILA.) This also is 
reflected in the continued decline in intensity and almost 



21 



Actual 




in 

5 0.4 



A, Intensity 



•V.Fof»CBSl 



J I I l__l I I I I I I I I 1__1 t 

1993 



, Actual 



B, Consumption 




1972 



1983 



1993 



Figure 11.— Nickel intensity of use and consumption in 
nonelectric machinery, 1972-93. 

level consumption through the forecast period. The recent 
decade's diminishing nickel requirement must be weighed 
against earlier cycles, including the strong growth of the 
1960's, in determining which movement to associate with 
future growth— a continuation of the present, or a new 
period in the cycle. 

The primary reason for declining nickel content in 
machines is largely a result of the increased use of specialty 
steel in manufacturing processes. Also certain plated steels 
have adequate corrosion protection for many environments 
and are replacing the more expensive stainless steels. 
Nevertheless, it is unlikely the 1972-82 trend will continue, 
and consumption is expected instead to decline toward an 
asymptote not much lower than the 1987 projected tonnage 
of 16,806 St. (See figure US.) Therefore, the 1993 table 8 
value is altered to show the substitute value. 

Electric and Electronic Equipment (SIC 3600) 

Intensity of use and consumption of nickel in this in- 
dustry, based on data since 1972, show a 57% and a 42% 
drop, respectively, during the historical period, again re- 
flecting a stronger decline in use of nickel than of the 
material in which it is used. (See figure 12.) The recent drop 
can probably be attributed in part to the slowed conversion 
to nuclear power-generating facilities in the late 1970's and 
early 1980's as well as to substitution of plastics for nickel 
in housing for electronic equipment. In the forecast period, 
the reduction continues to zero in 1989, despite the growth 
of electronic and electrical equipment at a rate of 5.3%/yr. 
There are several factors indicating that this wdll not result, 
and furthermore that the trend could reverse, including in- 
creased sophistication in power-generating and distribution 
equipment, innovations in the use of nickel powder alloys 
in transformers, and replacement of copper alloys with 



z 

9 nU 




A, Intensity 



Forecast 



■.1 
1972 



30 



I I I I I I i J- 



J I I I I I I > 



19B3 



1993 



vt 20 

z 
o 



oc 10 
o 

z 

(O 
i 

< 

3 

o 
x-io 



Actual 




8, Consumption 



Forecast 



-20 
1972 



J_J l_J I I I LJ LJ !_! I LJ 1 I I I I 



1983 



1993 



Figure 12.— Nickel intensity of use and consumption In elec- 
tric and electronic equipment, 1972-93. 



nickel alloys in lead frames for electronic circuit boards. 
The 1982 level of nearly 10,000 st, therefore, is assumed 
to be a floor below which electric equipment demand for 
nickel will not drop. The intensities shown in table 14 are 
the regression values for 1987 and 1993, even though these 
were not used to calculate the consumptions in table 8. 

Transportation (SIC 3700) 

The expected growth of nickel consumption for total 
transportation is distinct for each component of transpor- 
tation: automotive, aircraft, and ships. The transportation 
industry, however, is not forecast as a high-growth sector 
by Chase Econometrics, and the use of nickel in transpor- 
tation is projected to grow no faster than the industry itself, 
about 3.4%/yr. 

The decrease in consumption from 1972 to 1982 in the 
automotive component reflects the trend toward lighter cars 
that contain less nickel product per unit value. Plating, 
which is a large nickel consumer, is decreasing as plastic 
replaces nickel in decorative components. Catalytic con- 
verters now contain smaller segments of stainless steel. 
Bumpers that contained nickel have shrunk continuously 
since the 1960's. Therefore, in spite of recent market im- 
provements in the automotive industry, total consumption 
and the intensity have declined for nickel. Developments 
that may improve nickel intensity in the future include the 
introduction of nickel-plated terne sheets that could replace 
galvanized steel. A ferronickel product has also been 
developed to undercoat steel for subsequent chromium 
plating. Nickel consumption in the automotive component 
is likely to remain constant from 1987 onward because of 
these conflicting impacts on the nickel consumption ratio. 



22 



The intensity of nickel used in aircraft is also projected 
to be fairly constant. Although new nickel alloys, 
particularly some of the new powder alloys that have ar- 
rived in recent years, are well suited to the high-stress parts 
of aircraft jet engines, their small percentage of the total 
aircraft weight probably prevents significant changes in 
that ratio. The total consimiption of nickel fluctuates in the 
aircraft based on the general economy, which governs the 
replacement contracts. Since the collective private air fleet 
is aging, total consiunption is expected to increase and the 
ratio of nickel used to either remain the same or increase 
slightly. 

The nickel uses in shipbuilding are increasing. A driv- 
ing factor has been the Navy conversion to high-speed tur- 
bine engines and increased use of nickel in armor plating. 
The demand from the merchant fleet of ships should also 
increase over the next few years as ships begin to adopt 
copper-nickel sheathing as a protection against corrosion 
and barnacles. 



Table 9.— Iridium intensity of use and consumption 

, ^ , , Actual Forecast 

Industry' 

1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND TROY OUNCES 

PER MILLION 1977 DOLLARS 

Industrial chemical 0.40 0.03 *0.015 *0.015 

Electrical and electronic 18 .21 .13 .10 

CONSUMPTION, THOUSAND TROY OUNCES 

Industrial chemicals 14,429 1,222 '801 * 1,006 

Electrical and electronic 4,042 6,789 '6,000 *6,000 

Other2 19,283 3,589 4,407 7,550 

Total 37^754 11,600 11,208 14^556 

'These industries accounted for 76% of total iridium consumption in 1982. 
^Iridium consumed in petroleum refining is included in "other" and in the 
total for 1972 and 1982, but is not included in forecasts for 1987 and 1993. 
This is a departure from tables 15 through 18 where platinum, palladium, and 
iridium are combined, both historically and for projections. The reason is that 
iridium consumed in petroleum refining declined from 17,284 troy ounces in 
1972 to 1,111 troy ounces in 1982, and the 1987 and 1993 projections for the 
three metals (of which iridium is only a small part) are much greater than cur- 
rent iridium consumption for all uses. 

'Subjective value selected over regression value. 



PLATINUM-GROUP METALS 

The platinum group consists of six metals that usually 
occur together in nature and are among the rarest of 
metallic elements: platinum, palladium, iridium, rhodium, 
ruthenium, and osmium. Platinum, palladium, and iridium 
are discussed below. The platinum group with gold and 
silver make up the precious metals. 

From 1972 to 1982, total U.S. platinum consumption'* 
rose at a compound annual growth rate of 3.4% (table 9); 
total palladium declined at a rate of 0.5%/yr (table 10); and 
total iridivmi dropped sharply at a compound annual rate 
of 11.0% (table 11). For most end uses of the platinvmi-group 
metals during this period, there have been declines in in- 
tensity of use as measured by the ratio of metal consump- 
tion to constant dollar industry output. (See tables 9-11.) 

Although intensities are declining, consumptions are 
usually increasing, owing to growth in the industries con- 
suming platinum, palladium, and iridium. In the forecast 
period 1983-93, total domestic platinvun consumption is pro- 
jected to grow at a compound rate of 3.9%/yr (table 9), total 
palladiimi is projected to rise at a rate of 1.6%/yr (table 10), 
and total iridivun is projected to increase at a compound rate 
of 2.1%/yr (table 11). 

Platinum, palladium, and iridium are each consumed 
in about 10 sectors in the U.S. economy (based on a 4-digit 
SIC level of disaggregation). In 1982, motor vehicle parts 
and accessories (i.e., catalysts for catalytic converters in 
cars) consumed 67% of all platinum, electrical uses and 
medical and dental equipment each consumed 35% of 
palladium usage, and electrical uses consumed 64% of all 
iridiiun. 

Industrial Chemicals (SIC 2819, 2869) 

A diverse group of chemicals is produced using 
platinum, palladium, and to a much lesser extent, iridium 
in chemical catalysts. A 90%-Pt catalyst is used to produce 
HNOj and HCN, which in turn are used to produce fer- 
tilizers, explosives, insecticides, plastics, and other chemical 
intermediates and in pickling stainless steels. Palladium 



"Reported domestic consumption of primary and non-toll-refined secon- 
dary metal. Distribution baaed upon BOM end-use data, industry estimates, 
and analysts' estimates. Source: U.S. Bureau of Mines. Minerals Yearbooks, 
various years. Chapter on Platinum-Group Metals. U.S. International Trade 
Administration (DOC). 



Table 10.— Palladium intensity of use and consumption 

, ^ Actual Forecast 

Industry 

1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND TROY OUNCES 

PER MILLION 1977 DOLLARS 

Industrial chemicals 8.34 3.11 *1.16. '1.16 

Petroleum refining! 1.78 0.52 0.79 0.37 

Electrical and electronic . . 36.77 20.24 14.69 14.69 
Motor vehicle parts and 

accessories 24 35 4.43 5.58 6.16 

Medical and dental equip- 
ment and supplies *182.35 403.15 *282.92 *185.14 

Jewelry and precious 

metals 10.59 6.84 8.26 6.65 

CONSUMPTION, THOUSAND TROY OUNCES 

Industrial chemicals 303.816 132.649 *63.130 *79.225 

Petroleum refining' 138.782 46.213 85.426 42.364 

Electrical and electronic . . 443.503 321.973 •359.500 '450.263 
Motor vehicle parts and 

accessories ^150.000 122.005 '189.447 '214.526 

Medical and dental equip- 
ment and supplies 94.274 320.096 '344.000 '344.000 

Jewelry and precious 

metals 19.375 8.109 '7.000 '7.000 

Tota|3 999.750 951.045 1,048.503 1,137378 

■ilncludes platinum, palladium, and iridium. 

^This is a 1974 figure, which is the first year palladium was consumed in 
this end use. 

^Totals are somewhat overstated because the petroleum refining use in- 
cludes platinum and iridium consumption, in addition to palladium 
consumption. 

'Subjective value selected over regression value. 



Table 11.— Platinum intensity of use and consumption 

Actual Forecast 

Industry' 1972 1982 1987 1993 

INTENSITY OF USE, THOUSAND TROY OUNCES 

PER MILLION 1977 DOLLARS 

Industrial chemicals 6.83 1.12 1.12 1.12 

Petroleum refining2 1.78 .52 .79 .37 

Electrical and electronic .. . 3.91 2.52 2.29 1.61 
Motor vehicle parts and 

accessories 210.37 19.00 25.50 32.64 

CONSUMPTION, THOUSAND TROY OUNCES 

Industrial chemicals 248.936 69.649 '61.352 '76.994 

Petroleum^ 138.782 46.213 '85.426 '42.364 

Electrical and electronic . . 101.747 98.253 '121.944 '104.919 
Motor vehicle parts and 

accessories 3355.522 523.569 '726.801 '823.012 

Other 85.751 65.045 '138.902 '173.448 

Total" 575.216 802.729 1,134.425 1,220.737 

'These industries accounted for 92% of total platinum consumption in 1982. 

^Includes platinum, palladium, and iridium. 

3This is a 1 974 figure, which is the first year platinum was consumed in this 
end use. 

"Totals are slightly overstated because the petroleum refining use includes 
palladium and iridium consumption, in addition to platinum consumption. 

'Subjective value selected over regression value. 



23 



catalysts are used to produce organic chemicals used in 
making paints, adhesives, rubber, and vitamins. Other PPI 
(platinum, palladium, iridium) catalysts are used in mak- 
ing synthetic fibers. Although demand for PPI in the 
chemical industry has declined since the early 1970's, this 
trend is expected to reverse as more demand is expected 
for chemical intermediates and, in turn, PPI. While new 
applications for PPI catalysts are found, recycling 
technology will continue to limit demand, which should 
grow at a low rate through the 1990's. Tables 9-11 illustrate 
this slow growth in consumption from 1987 to 1993. 

Technological advances have increased the efficiency of 
recycling chemical catalysts. For example, a method for 
recapturing platinum (and rhodium) used in the production 
of HNO3 has reduced metal catalyst losses. This increase 
in recycling efficiency is an important factor in the declines 
in intensity of use (both historically and projected to 1987) 
shown in tables 9-11. 



Petroleum Refining (SIC 2911) 

Catalysts containing PPI are used in a variety of 
petroleum refining reactions, principally for increasing the 
octane rating of fuel by reforming and hydrocracking. Since 
the early 1970's, demand for platinum and iridium catalysts 
in petroleum refining has decreased. One of the main 
reasons for this decline is that platinum and iridium are 
now dispersed in finer particle size (i.e., much thinner 
coating) in the reforming chamber. This increases catalytic 
efficiency because not only is less platinum and iridium used 
in the thinner coating, but also the finer particle size means 
a much larger surface area, thus making the catalyst more 
active (i.e., effective). 

Demand for a palladium catalyst has increased since 
the early 1970's in its use in hydrocracking, a refining proc- 
ess that increases gasoline yields. Oil firms, wanting to pro- 
duce more gasoline, since it is a relatively high valued 
petroleum product, have been adding hydrocracking equip- 
ment, and therefore also the palladium catalyst, to more 
of their refineries. In addition, the petroleum industry has 
been refining increasingly heavier grade crude oils, which 
yield less gasoline per barrel of crude than do lighter oils. 
To overcome this problem of an otherwise lower gasoline 
yield, more hydrocracking equipment, and in turn more 
palladium, is being used. 

The demand for PPI in petroleum refining is expected 
to increase moderately through 1993, depending on the 
availablity and price of crude oil. The EPA has ordered a 
90% cut in the lead content of gasoline by 1986, a factor 
that could boost PPI demand, particularly because the pur- 
pose of adding lead is to increase octane ratings. As with 
chemical catalysts, petroleum catalysts are highly 
recyclable; petroleum catalyst life has been progressively 
extended over the years, from a 5-yr life to as long as a 12-yr 
life (before recycling becomes necessary). 

As shown in tables 9 and 10, the intensity of use for 
platinum and palladium declined in petroleum refining 
from 1972 to 1982, but is projected to increase until 1987 
before declining again through 1993; the tables show a 
similar pattern for consumption. The projected decline in 
PPI consumed in petroleum refining from 1987 to 1993 
might not occur. Substitution of other metals for PPI is 
unlikely because efficiency is a more important considera- 
tion in selecting a catalyst than is the cost of the metals 
used in this catalyst. The projected intensity of use ratios 
are difficult to evaluate, given the uncertainty of predict- 



ing the net effect of all the factors (discussed above) on each 

of three metals (PPI). 

Electrical and Electronic (SIC 3622, 3661, 3679 
and 3694) 

PPI are used in electrical contacts, switches, and relays, 
as well as in electronic circuits containing thick and thin 
films, and in capacitors, thermocouples, and fuel cell anodes. 
From the 1970's to the present, platinum demand has re- 
mained somewhat static, palladium demand has recently 
been increasing, while iridium demand has declined. De- 
mand for palladium, particularly in electronic applications, 
is expected to continue to show strong growth in the com- 
ing years, with strong growth expected for electronic defense 
systems, computers, and advanced satellite and communica- 
tion systems. In addition, since palladium is less expensive 
than gold, it is expected to partially displace gold in some 
electrical and electronic uses. On the other hand, 
palladium's use in telephone switching equipment is being 
displaced in the U.S. market by solid-state (electronic cir- 
cuitry) switching equipment. 

Table 9 shows a declining intensity of use for platinum 
during the entire 1972-93 period in the electrical and elec- 
tronic sector. Platinum consumption declined slightly from 
1972 to 1982 and is projected to increase to 1987 before 
declining to near current levels in 1993. Both projections 
seem reasonable given the possibility of more substitution 
of platinum by other, less costly metals (alloys) and/or solid- 
state electronic circuitry. 

Table 10 shows the intensity of use for palladium declin- 
ing from 1972 to 1987, and then remaining constant to 1993. 
Palladium consumption, which decreased 27% from 1972 
to 1982, is projected to rise 12% by 1987, and then increase 
another 25% by 1993. The 1987 and 1993 projections are 
consistent with the above discussion of palladium electrical 
and electronic uses. 

Table 11 shows that iridium's intensity of use increased 
17% from 1972 to 1982. Intensity is projected to decline by 
more than 50% and consumption to decline slightly, by 
1993. Because iridium is more expensive than all platinum- 
group metals except rhodium, it can be expected that other 
platinum-group metals as well as other metals (alloys) will 
substitute for iridium whenever this is possible without 
sacrificing performance. 

Motor Vehicle Parts and Accessories (SIC 3714) 

Platinum and palladium are used in catalysts for emis- 
sions control of carbon monoxide and hydrocarbons in cars 
and light-duty trucks. Since the United States began using 
automotive catalysts in 1974, demand for platinum and 
palladium has been somewhat cyclical, but generally shows 
an increasing trend. This is in spite of the fact that less 
platinum and palladiimi are now used per car than in 1974. 
For example, in 1974, 0.5 tr oz Pt was used per catalytic 
converter, and this has been reduced 10-fold in a typical 
three-way automotive catalyst containing 0.05 tr oz Pt, 0.02 
tr oz Pd, and 0.005 tr oz Rh. However, some additional 
platinum is needed for platinum oxygen sensors, which are 
used with three-way catalysts to control the air-fuel mix- 
ture of the carburetor. 

The increased efficiency in using platinum-group metals 
for automotive catalysts is similar to that for petroleum 
refining discussed earlier. Platinima and palladium are now 
dispersed in finer particle size (i.e., much thinner coating) 



24 



3 40r 



^ 30|- 

z 
o 



20 







/), Intensity 


- 




Forecast ^jr-'*" 
Actual ^^'""^ 


_^^ 


1 1 


r 1 1 1 ! 1 1 1 1 1 1 1 1 I 1 



1974 



2,000r 



1,000 



01 



1984 



8, Consumption 



1993 



Forecast 



Actual 



^^^- 



J I I I 



J LJ LJ I L 



1974 1984 1993 

Figure 13.— Platinum intensity of use and consumption in 
motor vehicle parts and accessories, 1 972-93. 

in the catalytic converter. Not only is less platinum and 
palladium used in the thinner coating, but also the finer 
particle size means a much larger surface area, thus mak- 
ing the catalyst more active (i.e., effective). 

The generally upward trend in platinum and palladium 
consumption since 1974 is expected to continue through the 
1990's. EPA-mandated emission limits of noxious gases 
have not been stiffened since 1981, but some individual 
States have instituted mandatory annual emission testing 
in the last few years. In addition, there is the possibility 
that EPA will extend the guidelines of present emission 
levels to more trucks and possibly institute guidelines for 
diesel emissions. 

Tables 9 shows both intensity of use and consumption 
of platinum in motor vehicle parts and accessories increas- 
ing throughout the 1974-93 period. This is in agreement 
with the above discussion. 

Figiu-e 13A shows the actual and estimated intensity 
of use ratios for platinum in motor vehicle parts and ac- 
cessories. Figure 13fi shows the actual and estimated 
platinum consumption for 1974-82 and 1974-93, respec- 
tively. A constant ratio was applied to calculate the projec- 
tions, since the usual procedure would have resulted in con- 
sumption projections almost double the level thought to be 
reasonable. Advances in technology, i.e., efficient usage, 
considerably reduce the likelihood of continued rapid 
growth in platinum consumed in this end use. 

Table 10 shows palladium's intensity of use increasing 
throughout the period 1974-93; however, it also shows 
palladium consumption declining from 1974 to 1982, and 
then increasing thereafter to 1993. The 1974-82 decline in 
palladium consumption reflects, in part, the increased effi- 
ciency in use of platinum-group metals discussed above. 

Recycling of automotive catalysts, while more trouble 
than recycling petroleum and chemical catalysts, shows 
signs of growing rapidly. 



Medical and Dental Equipment and Supplies 
(SIC 3843) 

PPI are used in dentistry in crown and bridge alloys and 
alloys for porcelain veneers. PPI are used in medicine for 
electrodes in cardiac pacemakers and in medical compounds 
for the treatment of certain types of cancers. Since 1973, 
platinum demand has been relatively static, palladium de- 
mand has varied but generally increased, and iridium de- 
mand has been essentially insignificant. Demand for 
palladium in dental materials is expected to continue to in- 
crease but at a lower rate, particularly since other materials 
such as ceramics and/or other precious metals can be 
substituted. 

As shown in table 10, the intensity of use ratio for 
palladium in dentistry and medicine more than doubled 
from 1972 to 1982, but it is projected to return to the 1972 
level by 1993. Similarly, the volume of palladium consumed 
in this use more than tripled from 1972 to 1982. It is pro- 
jected to increase only slightly from 1982 to 1987, and then 
level off to 1993. 

The intensity of use ratio for platinum declines 
throughout the 1972 to 1993 period, and platimmi consiunp- 
tion (roughly one-tenth as large as palladium consumption) 
also decreases from 1972 to 1993, interrupted only by a 
slight increase from 1982 to 1987. Iridium's intensity of use 
ratio and consumption volume had been declining from 1972 
to 1982, but the ratio is projected to increase to 1987 and 
then level off to 1993; iridium consumption is expected to 
increase from 1982 to 1993, but remain insignificant. 
Platinum and iridium for dental and medical uses are in- 
cluded as part of the "Other" category in tables 9 and 11, 
respectively. 

Medical uses of PPI are expected to grow quickly, but 
not consume large quantities of metal. Recycling is of minor 
importance to the dental and medical industry. 

Jewelry and Precious Metals (SIC 3911) 

PPI are used in jewelry for gem settings and decorative 
finishes. Demand since 1973 has remained static or declined 
somewhat over the last several years. No growth is expected 
to occur, and no change in American preference for gold in 
jewelry is anticipated. However, jewelry is subject to 
speculation, and this could result in cyclical swings in PPI 
consumption. Palladium consumed in jewelry is shown in 
table 10, and platinum and iridium consumption for this 
use are included as part of "Other" in tables 9 and 11, 
respectively. 

TIN 

From 1972 to 1982, U.S. primary tin consumption" 
decreased at a compound annual rate of 5.4%/yr, from 
70,300 to 40,300 mt (fig. 14). However, the decline was not 
steady, and 4 of the 10 yr showed consumption increases. 
Since 1980 there has been a decline in tin usage as 
measured by the ratio of tin consumption to constant doUsir 
industry output (intensity of use) for 22 of the 24 end-use 
sectors. 

From 1982 to 1993 total domestic tin consumption is 
projected to continue declining, but at a compound annual 
rate of 3.2%/yr (table 12). Tin consumption in 24 industries 

"U.S.-reported consumption of primary and secondary tin (includes scrap) 
in manufacturing products. BOM reports tin in metric rather than short 
tons. Distribution based upon BOM end-use data and analysts' estimate. 
Sources: U.S. Bureau of Mines. Minerals Yearbooks, various years. Chapter 
on Tin. U.S. International Trade Administration (DOC). 



25 



A, Intensity 



Actual 




1993 



^ 20 



o 

z 
< 

^ 10 

o 





B, Consumption 


_>^ Actual 




1 1 1 1 1 1 1 1 


\ ^»- Forecast 

1 1 1 1 1 1 1 I 1 1 1 1 1 



1972 1983 1993 

Figure 14.— Tin intensity of use and consumption in metal 
cans, 1972-93. 

Table 12.— Tin intensity of use and consumption 

Actual Forecast 

Industry' 1972 1982 1987 1993 

INTENSITY OF USE, METRIC TONS PER MILLION 1977 DOLLARS 

Industrial chemicals 0.192 0.082 0.036 *0.015 

Metal cans 3.87 1 .33 1 .08 * * .500 

Motor vehicles 158 .117 .098 .080 

Electronics 466 .203 .098 

Construction machinery and 

equipment 137 .096 .099 .091 

Valves, pipe fittings, metal foil and 

leaf, collapsible tubes 204 .130 .142 .119 

CONSUMPTION, METRIC TONS 

Industrial chemicals 7,010 3,489 1,961 * 1,000 

Metal cans 21,108 9,951 9,218 *4,831 

Motor vehicles 8,879 5,014 6,168 5,944 

Electronics 8,624 6,890 *6,269 "7,786 

Construction machinery and 

equipment 1 ,360 929 1 ,255 1 ,566 

Valves, pipe fittings, metal foil and 

leaf, collapsible tubes 2,165 1,738 2,438 2,563 

Other 21,166 12,247 10,389 7,536 

Total 70 . 312 40,258 37,698 31,226 

'These industries accounted for 70% of total tin consumption in 1982. 

*1989 value substituted for calculated value. 

**1991 value substituted for calculated value. 

in the U.S. economy based on a 4-digit SIC level of disag- 
gregation were analyzed in this study. The largest use is 
metal cans, accounting for 25% of tin consvmiption in 1982; 
this was followed by electronics at 17%, motor vehicles at 
12%, and industrial chemicals at 9%. 

Industrial Chemicals (SIC 2819) 

Tin is used in a variety of inorganic and organic 
chemicals. The largest tin organic compound use is as a 
stabilizer to produce polyvinyl chlorides (PVC), used to 
make plastic pipes, bottles, residential siding, and window 
frames. Other tin chemical uses include wood preservatives, 
marine (ship hull) antifoulants, and toothpaste additives. 



The forecast for these rather specialized chemicals is 
more optimistic than the trend projections for 1987 and 
1993. The least-squares estimate for 1993 was 0; however, 
according to industry specialists' judgment, use will not dip 
below the expected 1989 levels of 0.015 intensity and 1,000 
mt consumption (presented in table 12). Over the past 30 
yr, the most intensive research effort among all categories 
of tin consumption has been in the field of new uses for tin 
chemicals. Most of the Tin Research Institute's (the major 
tin research laboratory) efforts have been, and continue to 
be, in this area. 

Metal Cans (SIC 3411) 

Domestic tin consumption in this category essentially 
comprises the use of tinplate for cans and a small amount 
of solder for can joining purposes. Use of tin in this end-use 
has shown a fairly steady decline over the past 15 yr due 
to two main causes: (1) the inroads of aluminum in the 
beverage can market (tinplate still overwhelmingly holds 
the food can market); and (2) use of thinner tin coatings on 
steel by tinplate producers (i.e., the large steel firms). These 
causes will be less important in the future since there is 
little tin left in the beverage can market to be displaced, 
and tin coatings cannot be made much thinner without 
sacrificing corrosion resistance. 

Tinplate also faces competition in the container sector 
from glass, plastics, and composites (i.e., the cardboard 
bodies of frozen juice cans). Aluminvim has over 90% of the 
beverage can market, but only 4% of the food can market. 
The penetration of aluminum into the food can meirket, if 
it occurs, is expected to be a relatively slow process because 
of uncertainties regarding price relationships between 
aluminum and tinplated steel coupled with capital costs 
associated with such a conversion. Technical problems 
associated with alximinum can sidewall strength would also 
have to be solved. (See "Aluminum, Metal Cans" section 
for more detail.) 

This gradual decline of tin use in metal cans (now food 
cans) is consistent with the 1987 projection, which shows 
a 7.4% decrease in consumption compared with 1982 data 
(table 12); the intensity of use shows an 18.8% drop dviring 
these 5 yr. However, for the period from 1987-93, table 12 
shows much greater declines of about 50% for both tin con- 
sumption and intensity of use in this sector. This decline 
was adjusted upwards from a zero projection shown in figure 
14, to levels reached several years earlier. For the reasons 
stated above (and in more detail in the "Aluminum" sec- 
tion), the adjusted consumption and intensity of use from 
1987 to 1993 (shown in table 12) may also be low estimates; 
i.e., the 1993 projections appear to overestimate how 
quickly, if at all, aluminvim will replace tinplate in the food 
can market. 

Motor Vehicles (SIC 3711) 

Tin consumption in this category consists of three main 
uses: (1) tin-lead solder for body filler, used for joining struc- 
tural members, (2) solder for joining and subsequently 
repairing radiators, and (3) solder for joining circuitry in 
the vehicle. The first use has declined over the past 10 yr 
as ceirs have become smaller and as car makers have sought 
to eliminate lead from the workplace by instead using 
welded joints. The second use has decreased slightly as cars 
(and thus radiators) have become smaller and by the in- 
troduction of aluminum radiators, which do not use solder. 
Solder for radios, electronic ignitions, and other controls in 



26 



cars is the smallest of the three main uses, but is growing 
rapidly. 

It is expected that the first use will continue to decline, 
but the second use may remain constant since there have 
been problems fabricating and installing aluminum 
radiators and there are also some indications that new 
solder techniques could be used to repair them. Tin use in 
car electronics is expected to continue to grow. 

The above discussion is consistent with table 12, which 
shows tin use in motor vehicles increasing 23% from 1982 
to 1987 and then declining slightly in 1993. Intensity is 
declining throughout the 1972-93 period. 

Electronics (SIC 3621, 3622, 3651, 3674, 3679) 

In the electronics sector (primarily radio and TV sets, 
industrial controls, and semiconductors) intensity of use has 
declined substantially, as shown in table 12. There are two 
primary reasons for the decline. First, the use of printed 
circuit boards and solid state devices has reduced the 
amount of solder used in a single electronic device. Second, 
miniaturization has reduced the size of electronic com- 
ponents and, therefore, per unit consumption of tin. 

Table 12 shows that the volume of tin consvuned in elec- 
tronics declined 20% from 1972 to 1982, is predicted to fall 
another 9% by 1987, and is then projected to rise 24% in 
the 1987-93 period. The decline in tin used per unit of elec- 
tronics equipment is being offset by the rapid growth of the 
electronics sector, which is one of the fastest (if not the single 
fastest) growing areas in the economy. The total consump- 
tion forecast was calculated as a regression on the end use, 
rather than an intensity regression on time. 

Construction Machinery and Equipment (SIC 3531) 

Tin intensity of use in construction machinery and 
equipment declined 30% from 1972 to 1982, as shown in 
table 12. This decline is primarily the result of improved 
assembly techniques, which reduce soldering, and the 
substitution of tin by other alloys. From 1982 through 1993 
the intensity of use for this category is projected to remain 
relatively constant. The volume of tin consumption, which 
had declined 32% in the 1972-82 period, is projected to in- 
crease 69% from 1982 to 1993, as table 12 illustrates. The 
increase is totally a function of increased demand for con- 
struction machinery and equipment. 

Valves, Pipe Fittings, Metal Foil and Leaf, 
Collapsible Tubes (SIC 3499, 3497, 3494) 

In these uses, consumption has declined primarily 
because of substitution by other alloys, such as copper and 
aluminum. Plastic toothpaste pumps and tubes have 
substituted for tin toothpaste dispensing tubes. Tin con- 
sumption for this category is anticipated to remain rela- 
tively stable through the early 1990's. Table 12 shows the 
intensity of use decreasing slightly during the actual and 
forecast periods. The volume of tin consumption is projected 
to increase only slightly as the industry output increases, 
because of the intensity continuing in the other direction. 



TITANIUM 

The average annual growth in titanium demand for 
1972-82 was nearly 8%, even though there were severe 



M 

-J 
—I 
O 

o 



5 1 - 



w 



>), Intensity 




I I I I I I 



1972 
20 r 



I I I I I I I I I I' ' 



1983 



1993 



10 



B, Consumption y 



y^ 



Actual 




-> ■ I I I I I I I I I I I I I I I 

1972 1983 1993 

Figure 15.— Titanium intensity of use and consumption in 
fabricated plate work and special industrial machinery, 1972-93. 

Table 13. — Titanium sponge metal intensity 
of use and consumption 

Actual Forecast 

Industry 1972 1982 1987 1993 

INTENSITY OF USE, SHORT TONS PER MILLION 1977 DOLLARS 
Aircraft engines, engine parts, and 

auxiliary equipment 0.78 0.77 1.10 1.15 

Fabricated plate work and special 
industrial machinery, n.e.c, .... .20 .49 .97 1.26 

CONSUMPTION, SHORT TONS 
Aircraft engines, engine parts, and 

auxiliary equipment 10,978 12,130 16.042 *21,000 

Fabricated plate work and special 

industrial macfiinery, n.e.c, .... 2,091 5,198 *7,000 *10,000 

Total 13,069 17.328 23.042 31 ,000 

"Subjective value selected over regression value. 

slumps in 1975, 1976, and 1982. Only two industries were 
analyzed: aircraft industry use (70% in 1982) and all uses 
not associated with the aircraft industry (table 13). The air- 
craft industry intensity, the ratio of titanium consumption*" 
to constant dollar value of shipments for aircraft engines 
and aircraft parts, declined slightly from 1972, after peak- 
ing at more than 80% above the 1972 level in 1974 and 1981 
(fig. 15). 

Commercial production of titaniiun metal began in the 
e£irly 1950's. Because of the high strength-to-weight ratio 
of its alloys and their resistance to corrosion, titanium is 
an important strategic, critical material, and is widely used 
for high performance in military and civilian aircraft in 
both airframes and engines, in siuface condensers for 
powerplants, and for a wide variety of chemical processing 



"Consumption of reported titanium sponge. Data description based upon 
BOM end-use data, industry estimates, and analysts' judgment. Source: U.S. 
Bureau of Mines. Minerals Yearbooks, various years. Chapter on Titanium. 
U.S. International Trade Administration (DOC). 



27 



and handling equipment. In 1983, about 75% of titanium 
consumption was for aerospace applications. The titanium 
industry has been periodically subject to wide fluctuations 
in demand caused by abrupt changes in requirements for 
both military and commercial aircraft programs. 

The titanium intensity of use in nonaerospace applica- 
tions (fabricated plate work and special industry machinery, 
n.e.c.) increased substantially, peaking at over four times 
the 1972 value in 1980, and was still over double the 1972 
value in 1982. 



Aircraft Engines, Engine Parts, 
Auxiliary Equipment (SIC 3728) 

The aircraft industry consvunption pattern is extremely 
erratic during this period. Increases and decreases of 30% 
to 40% in titanium consumption occurred in 4 yr out of 9, 
and the direction of movement is frequently opposite that 
of aircraft industry output. Intensities do not follow a trend, 
making it difficult to use this method for developing 
projections. 

The upward trend in the ratios of titanium consump- 
tion to shipments in the aircraft industry is not statistically 
significant but is nevertheless perceived as the correct direc- 
tion, based on the judgment of the commodity specialists. 
This trend is expected to continue through 1993 (table 13). 
Higher titanium demand should result from increasing re- 
quirements for high-performance military aircraft, and from 
aircraft industry plans to replace aging airliner fleets with 
lighter, more fuel-efficient planes with a larger proportion 
of titanium than current models. It is expected that signifi- 
cant replacement of titanium by composites will not occur 
by 1993. Titanium is very compatible with composites 
because of its matching coefficient of thermal expansion smd 
high corrosion resistance, making it a preferred material 
for attaching composite parts being used to replace other 
materials, particularly aluminum. The statistically 
calculated projection for titanivmi consumption in 1993 us- 
ing the intensity projection is only 15,000 st, which was 
judged too low to fill the needs of the aircraft industry; a 
more reasonable forecast is 21,000 st, which represents a 
5%/yr growth rate during the 1972-82 period. 

Fabricated Plate Work and Special Industrial 
Machinery, n.e.c. (SIC 3443, 3559) 

Because of its corrosion resistance and high strength, 
titanium is likely to be increasingly used for applications 
in the electric utility, chemical processing, pulp and paper, 
oil refining, water desalinization, and other industries. A 
projection of titanium intensity of use for these applications 
doubled in 1987, then increased less rapidly through 1993, 
which was considered unrealistic. (See figure 15A.) The 
resulting projected consumption of 19,000 st in 1993, a 
growth rate of 9.2%/yr from 1982, is much higher than 
seems likely based on industry estimates. The forecast was 
adjusted downward to 7,000 st for this application in 1987, 
and 10,000 st in 1993, which represents a growth rate of 
6.1% from 1982's estimated trend value. (See figure 155 
and table 13.) 

Based on growth rates of 4.9%/yr and 6.1%/yr for 
aerospace and other industrial applications, respectively, 
from 1982 historical trend values, consiunption of titanivmi 
in 1993 is expected to total 31,000 st, 72% higher than the 
values for 1982. 



Table 14. — Tungsten intensity of use and consumption 

Actual Forecast 

Industry' 1972 19B2 1987 1993 

INTENSITY OF USE, THOUSAND POUNDS PER MILLION 1977 DOLLARS 
Machine tool accessories, metal cut- 
ting accessories, metalworking 

machinery 0.33 0.48 0.56 0.64 

Construction machinery .10 .15 .18 .21 

Mining machinery .59 .74 1 .07 1 .28 

Oil field machinery .54 .36 .29 .18 

Electrical equipment and supplies, 
n.e.c 2.31 2.05 2.47 2.02 

CONSUMPTION, THOUSAND POUNDS 
Machine tool accessories, metal cut- 
ting accessories, metalworking 

machinery 3,109 4,074 6,636 8,226 

Construction machinery 983 1,415 2,271 3,653 

Mining machinery 905 1,313 2,342 3,304 

Oil field machinery 1,118 1,522 1,396 1,076 

Electrical equipment and supplies, 

n.e.c. 1,800 1,202 1,893 1,809 

Other 5,381 4,471 6.675 8,177 

Total 13,296 13,997 21,213 26,245 

'These industries accounted for 68% of total tungsten consumption in 1 982. 



TUNGSTEN 

Tungsten's unique, high-temperature properties account 
for its increased demand, particularly in the major end use 
forms of carbide and pure metal. It is one of the few metals 
with increasing intensity of use. This characteristic, com- 
bined with the fact that it is consumed primarily in high- 
growih industries, led to a projected growth nearly double 
the current level by 1993^\ 

In the 1972-82 period, intensity of use increased in 11 
of the 21 industries tested; these industries accounted for 
51% of the tungsten consumed in 1982. Therefore, the total 
consumption is growing. Some declining uses, for example, 
blast furnaces and steel mills, have kept the consumption 
level fairly constant during this period, but will not con- 
tinue to do so in the forecast period. By 1987 tungsten con- 
sumption is expected to increase 52% over its 1982 level 
(table 14). One-third of this volume will have come from 
tungsten used in metalworking machinery and tools. 



Machine Tool Accessories, Metal Cutting 

Accessories, Metalworking Machinery 

(SIC 3549, 3545, 3541) 

Metalworking machinery, machine tool accessories, and 
cutting tools (considered for the purpose of this report as 
one industry) is the largest end use industry for tungsten, 
primarily in the form of carbides. The ratio of tungsten con- 
stimption to constant dollar industry output increased dur- 
ing the 1970's and is expected to continue growing during 
the 1980's and early 1990's. (See figure 16.) However, the 
growth rate is expected to decline as coatings continue to 
improve the cutting and wear resistance of cemented car- 
bide tool inserts, and as substitutes, such as aluminum ox- 
ide, cermets, and other materials, erode tungsten's market 
share. The use of tungsten in this market is growing not 
only as a result of increased intensity, but even more ow- 
ing to the growth of the industry itself. The 3. 5%/yr growth 
of metalworking machinery and tools will keep the tungsten 
demand high even when intensity growth has leveled. 



^'Primary products consumption of contained tungsten (includes scrap). 
Data distribution was based upon BOM end-use data and analyst estimates. 
Sources: U.S. Bureau of Mines. Minerals Yearbooks, various years. Chapter 
on Tungsten. U.S. Federal Emergency Management Agency. 



28 



0.6r 





Figure 16.— Tungsten intensity of use and consumption in 
metalworking machinery, 1972-93. 



Construction Machinery, Mining Machinery, 
Oil Field Machinery (SIC 3531 , 3532, 3533) 

Construction and mining machinery, two of tungsten's 
largest consuming industries, have been and will continue 
using increasing amoimts of timgsten, primarily in the form 
of cemented carbides to improve machinery productivity. 

Although oil field machinery use of tungsten has in- 
creased in each year except the 1975 and 1982 recessions, 
the intensity of use had declined because tungsten consump- 
tion did not grow as fast as oil field machinery output, a 
very fast growing sector in the 1970's, even before the OPEC 
price increase. Omitting the depressed 1982 figures, the 
compound growth rate for tungsten was 7.8%/yr, but that 
of oil field machinery was 9.8%/yr. Oil field machinery is 
not expected to continue growing at that high rate, but will 
fall back to only 2.9%/yr. This has the effect of reducing 
tungsten consumption slightly, when coupled with the 
decreasing intensity. 

Like metalworking machinery, the construction and 
mining machinery industries' use of tungsten benefits from 
both industry growth and growing intensity of use within 
those industries. Combined, the projected increase is 6.8%/yr 
growth. 

Electrical Equipment and Supplies, n.e.c. 
(SIC 3699) 

Electrical equipment and supplies' demand for tungsten 
is another large end use sector and follows the usual un- 
predictable pattern of tungsten consumption. The tonnage 
figure changed direction during the historical period more 
often than it continues in the same direction. Furthermore, 
the movements of tungsten volume do not match the 



movements in user industry volume, reducing the value of 
the intensity calculation. There is a downward trend, in 
spite of some very large increases. The 1970's downward 
trend primarily reflects the growing use of solid state igni- 
tion systems, which replaced tungsten contact points in 
automobiles. Indications are that tungsten usage per unit 
of output will remain virtually unchanged through the 
1980's and 1990's. 

Other 

Three other tungsten end use consuming industries are 
worthy of note— X-ray shielding, ammunition, and in- 
dustrial inorganic chemicals. The use of tungsten as a 
catalyst for use in the chemicals industry and as a metal 
for X-ray shielding could substantially increase; conversely, 
the use of tungsten for ammunition is being replaced by 
depleted vu-anium. Thus, the ratio of tungsten consumption 
to output in the former industries is expected to substan- 
tially increase during the late 1980's and early 1990's but 
is expected to substantially decline in the latter 1990's. 

ZINC 

Total U.S. slab zinc consiunption** decreased by almost 
half from 1972 to 1982, falling from 1.4 million st to 781,248 
st (table 15). This represents a decline of 6%/yr at a com- 
pound rate, due in part to recessions in the construction and 
motor vehicle industries in 1982 and to a decrease in zinc 
consumed by the cutlery, handtools, and hardware sectors. 
Similarly, from 1972 to 1982 there was a decline in zinc's 
intensity of use (ratio of zinc consvmiption to constant-dollar 
industry output) for all major end uses except construction. 

Domestic zinc consumption is projected to reach 842,100 
st in 1993. The actual rise in total slab zinc consumption 
to 888,000 st in 1983 and to 936,000 st in 1984 would have 
tempered the intensity decline, had these data been in- 
cluded in the estimation. Their presence would not have 

""Slab zinc consumption. Distribution of data based upon Bureau of Mines, 
the American Iron and Steel Institute, the Zinc Institute, and analyst 
estimates. Sources: U.S. Bureau of Mines. Minerals Yearbooks, various 
years. Chapter on Zinc. U.S. International Trade Administration (DOC). 

Table 15.— Slab zinc Intensity of use and consumption 

Actual Forecast 

Industry^ 1972 1982 1987 1993 

INTENSITY OF USE, SHORT TONS PER MILLION 1977 DOLLARS 
Construction: 

general 0.0013 0.0014 0.0016 0.0017 

highway 0006 .0006 .0007 .0008 

heavy 0013 .0015 .0018 .0020 

Motor vehicles and equipment .0040 .0024 .0012 .0002 

Air conditioning and heating . .0044 .0031 .0024 .0016 
Heating equipment and 

plumbing fixtures 0117 .0072 .0057 .0033 

Cutlery, handtools, and 

hardware 0200 .0088 .0028 '.0018 

CONSUMPTION, THOUSAND SHORT TONS 

Construction: 

general 130.87 95.01 141.04 168.87 

highway 63.97 42.57 64.68 74.88 

heavy 135.71 107.61 161.05 194.93 

Motor vehicles and equipment 372.79 180.53 ••264.29 **312.07 

Air conditioning and heating . 38.12 26.97 26.13 21.25 
Heating equipment and 

plumbing fixtures 34.60 20.88 22.39 14.9 

Cutlery, handtools, and 

hardware 147.85 57.92 25.78 **19.78 

Other 494.49 250.66 111.66 35.42 

Total 1,418.40 781.25 817.02 842.10 

'These industries accounted for 68% of total slab zinc consumption in 1982. 

*1988 intensity ratio. 

••Subjective value selected over regression value. 



29 



changed the direction, however, of a downward trend. In- 
creasing zinc demand for galvanizing steel in the motor 
vehicles and construction sectors is expected to offset con- 
tinued long-term decreases in both consumption and inten- 
sity of use of zinc in most other end-use sectors. 

Slab zinc consumption was analyzed in 35 industries in 
the U.S. economy based on a 4-digit SIC level of disaggrega- 
tion. The largest use was construction, accounting for 31% 
of zinc consumption in 1982, followed by motor vehicles and 
parts at 23%, and cutlery, handtools, and hardware at 8%. 
In the construction and motor vehicle industries, zinc 
coatings (galvanizing) provide corrosion protection to steel. 
Zinc die-cast parts are used by motor vehicles and by the 
appliances and machinery sectors. Brass (copper alloyed 
with zinc) is used in builders hardware, consumer goods, 
and electrical parts. 

Construction (SIC 1500, 1610, 1620) 

Consumption of zinc in the construction sector 
represents the largest use of zinc in the United States. This 
sector includes general, highway, and heavy construction. 
Zinc in these end-use sectors is used predominantly as a 
protective coating material in galvanized sheet, wire, tubes, 
and fittings. A small amount is consumed as rolled zinc. 
The consvunption of zinc in construction declined from 1972 
to 1982, mostly because of a long-term downtrend in new 
construction activity. In fact, total construction expen- 
ditures declined by one-third during this period. 

During the 10-yr forecast period, zinc consumption in 
the construction sector is projected to rise to 439,000 st in 
1993. A slight increase in the intensity of zinc usage is ex- 
pected, and a projected turnaround in construction activ- 
ity will result in increased zinc consumption in this sector 
through 1993. Today's marketplace has become more aware 
of the benefits gained by using zinc coatings for corrosion 
protection. In addition, there is no economic substitute for 
zinc that provides the same quality and durability. These 
factors should lead to increased zinc consumption in the 
future. 

Motor Vehicles and Equipment (SIC 3710) 

This end-use category includes automobile, truck, and 
bus manufactures. The largest area of zinc use in the 
category is in automobile production, where zinc is used as 
zinc die-cast parts such as grills, handles, and locks; as brass 
items such as radiators, tubing, and electrical fittings; and 
as zinc coating on steel to provide corrosion protection. Zinc 
used in tire production, which requires about 0.5 lb ZnO 
per tire, is not included. 

The domestic automobile manufacturing sector under- 
went several fundamental changes since 1972 that affected 
the course of zinc usage in vehicles. The principal change 
in zinc demand per automobile was initiated by the "oil 
crisis" of 1973-74, which set off large-scale downsizing and 
weight reduction programs that reduced the amount of zinc 
diecastings as well as brass used in cars. The reduction was 
carried out by substituting aluminum and plastics for zinc, 
elimination of parts, and using thin- wall zinc diecastings, 
which require less zinc than previously required in tradi- 
tional diecastings. In 1975, about 51 lb of zinc diecastings 
were used in the average domestically built automobile; this 
declined to an average of 23 lb per automobile in 1983. 
Another major factor affecting zinc demand in this sector 
was automobile imports and their effect on domestic out- 



put of automobiles. Domestic manufacturers, unable to com- 
pete in the small, fuel-efficient, automobile segment of the 
market, lost market share and produced fewer units. In 
summary, zinc consumption in the domestic automotive sec- 
tor fell owing to downsizing and weight reduction programs, 
substitution for and elimination of zinc die-cast parts, and 
production of fewer automobiles in the 1972-82 period. 

The forecast of intensity of use is that the trend will con- 
tinue decreasing, even when the 1983 upturn is included. 
However, more recent data and automotive industry plans 
for future zinc use would indicate more usage in the forecast 
period. The decline in the weight of zinc diecastings per 
automobile appears to have leveled out in 1983 and rose 
slightly in 1984. Also, in recent years consumer concern for 
longer lasting automobiles, coupled with fierce import com- 
petition, has resulted in a stronger emphasis on corrosion 
protection by automobile manufacturers. Zinc coating usage 
for corrosion protection of steel underbody parts has in- 
creased significantly in recent years and is planned to in- 
crease further in the next few years. An annual survey of 
the top four domestic automakers indicated that the average 
1984 model car contained 7.15 lb Zn in coatings compared 
with 6.59 lb Zn in the average 1982 model car. In response 
to 5-yT rust protection warranties, auto manufacturers plan 
to order increasing amounts of zinc precoated steel for the 
1986 and future model automobiles. The same trend is tak- 
ing place in the manufacture of trucks and buses. To pro- 
vide the necessary protection, the previously uncoated outer 
surfaces of exterior panels such as fenders and doors will 
be zinc coated mainly by electrogalvanizing. To meet the 
expected electrogalvanizing sheet demand, steel companies 
have and are increasing their electrogalvanizing capacity. 

In summary, zinc demand in this sector is expected to 
increase despite 10 yr of declining use; therefore, the pro- 
jected trends have not been used in the tables. Instead, the 
projections use the 1983 intensity of use ratio extended 
through the forecast period, giving what is thought by the 



I — I 
•-S 

O 1^ 
X "^ 

<% 

o s 



.004 






4, Intensity 


.003 


- 


\^*^ 








nI::^ 


Actual 


.002 






*-^^ Forecast 


.001 



1 


1 1 1 1 


II II II III 1 1 1 1 T 


19 


72 




1983 1993 




8, Consumption 



Actual 



v^.. 



\-^' 



"•.^FoTBCaat 



I I I I I l_l LJ I I I I I I I I I I 



1972 



1983 



1993 



Figure 17.— Zinc intensity of use and consumption in motor 
vehicle parts and accessories, 1972-93. 



30 



experts to be a more realistic estimate. It is possible the 
adjustment is high, but raised levels of zinc consumption 
in 1983 and 1984 (not included in the data base) could not 
have been predicted by the estimated equation. 

Figure 17A shows that for motor vehicles and parts, 
zinc's intensity of use has been relatively constant since 
1977, with the exception of 1980-81. Because of declines in 
the earlier years 1972-76, the trend line projected to 1993 
is downward. Figure IIB shows zinc consumption for the 
1972-83 actual tonnage, and a forecast resulting from ap- 
plying the 1983 ratio to industry output. The constant (1983) 
ratio forecast was chosen because, as discussed above, the 
outlook for zinc in this end use is optimistic. 

Air Conditioning and Heating (SIC 3585) 

Another large consuming sector of zinc is the air condi- 
tioning and heating sector. Zinc in this sector is consumed 
predominantly in galvanized sheet and tubes, with lesser 
amounts in brass sheet, tube, and zinc die-cast parts. The 
historic long-tenn trend of zinc usage in this sector is 
decidedly downward, declining by one-third over the 
1972-82 period. The forecast for this end-use sector reveals 
continued declining intensity of use and consimiption. This 
projection assumes no fundamental change in historic de- 
mand factors. Thus, the moderate decline in actual con- 
sumption could stabilize at current levels or increase 
slightly if market factors are altered. An example of this 
is the future mix of single unit versus multiunit residen- 
tial dwellings, with strong demand for multiunit dwellings 
resulting in strong demand for air conditioning and heating 
equipment. 



Heating Equipment and Plumbing Fixtures 
(SIC 3430) 



Zinc is consumed in this sector mostly as brass rod and 
castings, with minor amounts of other diecastings and 
galvanized products. Finished goods in this sector include 
drains and faucets, traps, and other brass goods, and cast 
components in air heaters and furnaces. 

Zinc consumption in this sector has experienced a fluc- 
tuating long-term decline. This was due to material 
substitution and to thin-wall die-cast parts in plumbing and 
heating applications. While this downtrend is projected to 
continue, it is expected to be at a much reduced rate since 
the substitution of zinc by other materials appears to have 
abated. In fact, the 1993 projection may represent the low 
end of zinc consumption in this sector. Zinc consumption 
in plumbing and heating may very well remain steady or 
increase slightly given the expected turnaround in the con- 
struction sector. 



Ottier 

Of the remaining 28 sectors, 18 projected zero consump- 
tion before 1993. Although this is not a probable consump- 
tion level in most cases, the individual forecasts were not 
altered and their total, 111,000 st in 1987 and only 35,000 
st in 1993, is probably erroneously low. The zinc specialist 
pointed out the 1993 "Other" tonnage might be accounted 
for by zinc penny use alone. 



CONCLUSIONS 



The analyses of changing intensities of use have shown 
that for the historical period, 1972-82, structural changes 
occiured in an overwhelming majority of end uses for all 
12 metals. Chromium, cobalt, copper, lead, manganese, 
nickel, tin, and zinc are experiencing declining use. 
Aluminiun, the platinum-group metals, titanium, and 
tungsten exhibited consumption growth. Out of 232 regres- 
sions run, 188, or 81%, of all 12 metals' end uses had 
decreasing intensities; for chromium, manganese, lead, and 
tin, the percentages were over 90%. 

Although it is possible for consumption to grow in an 
opposite direction from intensity of use, when end use prod- 
uct growth is strong but contains less of the metal per unit 
of product, this has not often been observed in this historical 
period. It is expected to occur more often in the forecast 
period, however, when economic growth in user industries 
is expected to continue to be as strong as or stronger than 
that of 1983 and 1984. 

If intensity of use had been measured as consumption 
per capita or consumption per million dollars of real GNP, 
all metals in the study except titanium would be seen to 
have declined. Total U.S. nonferrous metal consimiption per 
million dollars real GNP declined 49.2% between 1972 and 
1982, and nonferrous metal consimiption per capita declined 
37.2% in the same period. 

FACTORS AFFECTING INTENSITY OF USE 

An event of singular importance in effecting changes 
in metal requirements was the first and major OPEC price 
increase in late 1973. The effects on the energy-intensive 



mineral industry were strongest in 1975. The 1975 reduc- 
tion in consumption, averaged over all 12 metals, was 
30.5%. 

Total consumption for each metal shows a major dip in 
1975. Only aluminum, the platinum group, titanium, and 
tungsten have recovered from the 1975 decline. Intensity 
of use and consumption of other metals began recoveries 
in 1976 and continued to improve until 1979, when the sec- 
ond major oil price increase caused another drop in metal 
demand. With the onset of the 1981-82 recession, metal in- 
dustries were already in a decline, further compounding 
their problems. The average 1982 reduction in consump- 
tion for the 12 metals was 27.2%. 

The industries that consume metals recovered more 
rapidly than did the metal industry. This is verified by the 
decreasing intensity of use ratios, in which the consuming 
industry output (denominator) grew faster than metal con- 
sumption (numerator). The consuming industries reduced 
costs by effecting production efficiencies, material substitu- 
tions, and product design changes that reduced the metal 
content of their products. The metal industries had one ad- 
ditional major production cost imposed during this period, 
that of pollution abatement. 

This technological change effect on metal reduction is 
intensified by the slow, steady change in the composition 
of GNP. Although manufacturing has remained a fairly 
steady component over time, the real growth is in services, 
utilities, trade, finance, insurance, and the other com- 
ponents with low metal requirement. Both metal mining 
and primary metals have negative growth. 

A third factor influencing decline in metal consumption 



31 



by U.S. manufacturers is the increasing integration and 
competition in the world economy. As a result, the United 
States imports not only raw products and final goods, but 
intermediate goods as well, thereby reducing demand for 
the comparable domestically produced goods. Metal demand 
is a function of its intensity of use in its own immediate 
markets, as well as the intensity of use of those goods in 
their markets. For example, manganese consumption in 
domestically manufactured machinery is a function of the 
reduced per unit requirement of manganese in steel, the 
reduced per unit requirement for steel in machinery, the 
imports of both steel and machinery, and the imports of 
goods that machinery might have produced domestically 



RELATED STUDIES 



Several projects planned by the Bureau of Mines should 
enhance knowledge of structural change in the metal in- 
dustry. The first, already in progress, is a measure of in- 
tensity of use changes in other countries for a group of 
metals including steel. This study will attempt to quantify 
causes for change over time and to derive a mathematical 
expression of total change as a function of its major causes. 
A second study uses input-output analysis to measure 
technological change and the effects of variation in final 
demand distribution. 



32 



APPENDIX.— EQUATIONS 



The following tables are the equations estimated by or- 
dinary least-squares regressions over the 1972-82 (or some 
cases 1972-83) time series. The econometric software 
package used is ESP from the Alpha Software Corp. of Bur- 
lington, MA, in conjunction with the Mikros Corp. Each 
table is a listing of equations for the metal identified at the 
top, listing selected end uses of that metal. 

The equations add an analytical dimension that cannot 
be observed in the tables of the main text, where only two 
points each in real time and forecast time are shown. The 
equations show that nearly every major user of metals has 
a negative slope in the intensity equation; i.e., industries 
are using less metal per unit of output in each succeeding 
time period. The strength of the movement is shown in the 
R-square column, where many equations have an R-square 
larger than 0.8, quite a strong correlation between lower 
use and time. 

In each case the dependent variable is the ratio of metal 
consumption to industry output, and the only independent 
variable is time. The equation is 



where 



X = 



y = 



x/y = a + bt. 



volume of metal consumed in each year, meaisvired 
in the unit indicated, by a particuleir industry; 
value of industrial output in each year in the iden- 
tified industry, measured in constant 1977 dolleirs; 
the estimated intercept is shown with its calculated 

Table A-1 .—Aluminum equations^ 

(Estimation period, 1972-83) 



T statistic in parentheses. For 10 degrees of 
freedom, T = 1.81 is significant at the 95% con- 
fidence level. 

b = the estimated slope, or coefficient of time in the 
equation. The slope is also interpreted as 
statistically significant when T = 1.81. A negative 
slope indicates a decreasing use of metal per unit 
of industry output, and a positive slope, an increas- 
ing use. 

t = time in years, where t = 1 represents 1972, 
t = 2 is 1973, etc. 

R square = the estimated degree of lineair association 
between x/y and time, sometimes inter- 
preted as the percentage of change in x/y 
"explained" by the time variable. 



Since the y series, the industrial outputs expressed in 
constant dollars, are forecast by Chase Econometrics 
through 1993, the x volumes of metal may also be forecast, 
using the estimated equations, for any time period between 
1982 and 1993: 

X forecast = y forecast times (x/y) regression estimated in t 

The column labeled SIC indicates the standard in- 
dustrial classification, at the given level of aggregation, of 
the end-use industry. The equations are given for each metal 
in alphabetical order. 

Table A-3.— Cobalt equations^ 

(Estimation period, 1972-83) 



Industry 


SIC 


Intercept 


Slope R-square 


Industry 


SIC 


Intercept 


Slope 


R-square 


Metal cans 


3411 


0.05874 


0.0130341 0.98 


Chemical, paints, 


2816, 2819, 


0.1482 


-0.0066 


0.65 


Sheet metal work . . 


3444 


.10777 


-.00276 .70 


ceramics, and 


2851, 2899, 


(13,09) 


(-4.30) 




Electric and elec- 


3600 


-.008121 


-21.155 .78 


other. 


3229, 3253, 








tronic equipment. 




(-.000314) 


(-6.02661) 




3262 








Motor vehicle 


3711, 3714 


.00556 


.000143 .70 


Machinery and 


3291, 3356, 


.0585 


-0.0025 


.60 


lx>dies, parts. 




(25.664) 


(4.87756) 


machine tools. 


3357, 3369, 


(12.20) 


(-0.386) 




accessories. 










3423, 3441, 








Transportation 


3721, 3724, 


.00659 


13.7301 .38 




3443, 3471 , 








equipment. 


3728, 3731, 
3732, 3743, 

3751, 

3761, 

3764. 

3769, 

3792, 


(-.00016) 


(-2.475) 




3473, 3499, 
3511, 3523, 
3531 , 3532, 
3533, 3535, 
3537, 3541 , 
3544, 3545, 
3549 










3795, 






Transportation 


3519, 3714, 


.0718 


.0038 


.25 




3799 






Electrical 


3724 
3264, 3662, 
3679 


(4.68) 
.3449 
(16.10) 


(1.84) 
-.0258 
(-8.88) 




^Dependent variable: Thousand short tons of aluminum per million 1977 
dollars. 


.89 



NOTE. — Numt>ers in parentheses represent respective t-statistic. 

Table A-2.— Chromium equations^ 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Chemicals industry 2800 0.00093 -0.0000215 037 

(14.102) (-2.405) 

Refractory industry 3297 .12798 -.0086679 .87 

(16.745) (-8.348) 

Fabricated metal products . 3400 .000615 -.000021 .48 

(12.183) (-3.066) 

Machinery 3500 .000365 -.0000196 .83 

(17.383) (-6.90326) 

Transportation 3700 .000537 -.0000162 .47 

(13.344) (-2.9603) 

Other metal 9999 .1446 -.00503 .49 

(12.03) (-3.08) 

'Dependent variable: Thousand short tons of chromium per million 1977 
dollars. 

NOTE.— Numbers in parentheses represent respective t-statistic. 



'Dependent variable: Thousand pounds of cobalt per million 1977 dollars. 
NOTE.— Numbers in parentheses represent respective t-statistic. 



Table A-4.— Copper equations^ 

(Estimation period, 1972-83) 

Industry siC Intercept Slope R-square 

Heavy construction 1600 0.0055 0.0002 048 

(1 1 .24) (3.03) 

General construction 1700 .0052 .00017 .42 

(11.46) (2.67) 

Air conditioning and heating 3585 .013 -.00024 .82 

equipment. (50.08) (-6.69) 

Household appliances 3630 .0095 -.00009 .32 

(29.75) (-2.16) 
Motor vehicle parts and 3710 .0046 .00004 .09 

accessories. (16.35) (.97) 

'Dependent variable: Thousand short tons of refined reported copper per 
million 1977 dollars. 

NOTE.— Numbers in parentheses represent respective t-statistic. 



33 



Table A-5.— Lead equations* 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Batteries". 3691 0.523 -0.0066 0.40 

(27.68) (-2.58) 

Gasoline additives 2869 .0081 -.00049 .95 

(30.46) (-13.56) 

General construction 1520 .00033 -.000008 .72 

(28.17) (-5.07) 

Heavy construction 1540 .0005 -.00001 .54 

(20.53) (-3.4) 

Ammunition 3482 .168 -.0059 .18 

(5.76) (-1.47) 

Pigments 2816 .0029 -.0001 .77 

(22.66) (-5^8) 

'Dependent variable: Thousand short tons of primary and secondary lead 
per million 1977 dollars. 

NOTE.— Numbers in parentheses represent respective t-statistic. 

Table A-6.— Manganese equations* 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Transportation 3700 0.0002 -0.00002 0.85 

(21) (-7.5) 

Construction 1500,1600, .00305 -.00011 .79 

3440 (20.5) (-6.08) 

Machinery 3500, 3610, .0028 -.00015 .92 

3620 (24.2) (-10.5) 

'Dependent variable: Thousand short tons of manganese per million 1977 
dollars. 

NOTE. — Numbers in parentheses represent respective t-statistic. 

Table A-7.— Nickel equations' 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Fabricated metal products. 3400 0.9279 -0.0289 0.62 

(18.24) (-3.859) 

Construction 1500,1600, .382 -.028 .79 

1700 (11.70) (-5.85) 

Chemical and allied 2800 .55 -.21 .69 

products. (17.12) (-4.46) 

Machinery except electri- 3500 .305 -.013 .75 

cal. (17.64) (-5.24) 

Electrical and electronic 3600 .321 -.019 .77 

equipment. (13.95) (-5.51) 

Transportation 3700 .183 -.0005 .003 

(8.26) (-.164) 

'Dependent variable: Thousand short tons of nickel per million 1 977 dollars. 
NOTE. — Numbers in parentheses represent respective t-statistic. 

Table A-8.— Platinum equations* 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Industrial chemicals 2819, 2869 6.69 -0.505 0.78 

(11.13) (-5.71) 

Petroleum refining^ 2911 1.90 -.07 .17 

(5.45) (-1.35) 

Electrical and electronic ... 3622,3661, 4.09 -.113 .45 

3662 (14.41) (-2.69) 

Motor vehicle parts^ and 3714 6.47 1.18 .55 

accessories. (2.13) (2.92) 

'Dependent variable: Troy ounces of platinum per million 1977 dollars. 
^Figures shown include platinum, palladium, and iridium. 
^Estimation period 1974-82. 

NOTE. — Numbers in parentheses represent respective t-statistic. 



Table A-9.— Palladium equations* 

(Estimation period. 1972-83) 

Indust^ SIC Intercept Slope R-square 

Industrial chemicals 2819, 2869 7.05 ^45 0.67 

(9.82) (-4.28) 

Petroleum refining^ 2911 1.90 -.07 .17 

(5.45) (-1.35) 

Electrical and electronic .... 3613,3622, 33.64 -1.68 .39 

3661 (7.02) (-2.38) 

Motor vehicle parts' and 3714 1.22 .44 .47 

accessories. (11 6) (2.82) 

Medical and dental equip- 3843 134.64 22.09 .78 

ment and supplies. (5.13) (5.71) 
Jewelry and precious metals 3911 12.55 -.27 .05 
(4.65) (-.67) 

'Dependent variable: Troy ounces of palladium per million 1977 dollars. 

^Figures shown include platinum, palladium, and iridium 

'Estimation period 1974-82. 

NOTE. — Numbers in parentheses represent respective t-statistic. 

Table A-10.— Iridium equations* 

(Estimation period, 1972-83) 

I ndustry SIC " Intercept Slope R-square 

industrial chemicals 2319, 2869 0.295 -0.280 0.63 

(6.06) (-3.91) 
Electrical and electronic .. . 3622,3661, .133 .011 16 

3679, (2.37) (1.29) 
3694 

'Dependent variable: Troy ounces of iridium per million 1977 dollars. 
NOTE. — Numbers In parentheses represent respective t-statistic. 

Table A-11.— Tin equations* 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Industrial chemicals 2819 0.2006 -0.0103 0.88 

(23.63) (-8.225) 

Metal cans 3411 3.183 -.1313 .79 

(21.10) (-5.90) 

Motor vehicles 3711 .147 -.0031 .29 

(13.49) (-1.90) 

Electronics 3621,3622, .4508 -.0220 .91 

3651, (29.28) (-9.70) 
3674, 
3679 

Construction machinery 3531 .1203 -.0013 .08 

and equipment. (11.49) (-.874) 

Valves, pipe fittings, 3494,3497, .2059 -.0040 .23 

metal foil and leaf, col- 3499 (12.67) (-1.66) 
lapsible tubes. 

'Dependent variable: Metric tons of tin per million 1977 dollars. 
NOTE.— Numbers in parentheses represent respective t-statistic. 

Table A-1 2.— Titanium sponge metal equations* 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Aircraft engines, engine 3724, 3728 0.967 0.0082 0.01 

parts, auxiliary (5.67) (.328) 

equipment. 

Fabricated plate work and 3443, 3559 .205 .0479 .64 

special industrial 

machinery. (2.504) (3.97) 

'Dependent variable: Short tons of titanium metal sponge per million 1977 
dollars. 

NOTE.— Numbers in parentheses represent respective t-statistlc. 



34 



Table A-1 3. —Tungsten equations^ 

(Estimation period, 1972-82) 



Industry 


SIC 


Intercept 


Slope 


R-square 


Machine tool accessories, 


3541, 3545. 


0.3538 


0.0106 


0.53 


metal cutting ac- 


3549 


(15.806) 


(3.198) 




cessories, metal work- 










ing machinery. 










Construction machinery . . 


3531 


.0914 
(9.34) 


.545 
(3.78) 


.61 


Mining machinery 


3532 


.5270 
(5.45) 


.0342 
(2.40) 


.39 


Oil field machinery 


3533 


-.0177 
(13.38) 


.5730 
(-2.80) 


.47 


Electrical equipment and 


3699 


3.67 


-.075 


.10 


supplies. 




(7.02) 


(-.973) 





1 Dependent variable: Thousand pounds of tungsten per million 1977 dollars. 
NOTE. — Numbers In parentheses represent respective t-statistic. 



Table A-1 4.— Slab zinc equations^ 

(Estimation period, 1972-83) 

Industry SIC Intercept Slope R-square 

Construction: 

General 1500 0.0012 0.000022 0.24 

(13.98) (1.66) 

Highway 1610 .00063 .000006 .11 

(18.03) (1.08) 

Heavy 1620 .00134 .00003 .48 

(20.14) (2.853) 

Motor vehicles and 3710 .0037 -.00016 .75 

equipment. (17.90) (-5.17) 

Air conditioning and 3585 .0044 -.00013 .85 

heating. (37.53) (-7.28) 

Heating equipment and 3430 .0122 -.00041 .65 

plumbing fixtures. (17.92) (-4.05) 

Cutlery, handtools, and 3420, 3429 .0195 -.00104 .89 

hardware. (23.14) (-8.39) 

'Dependent variable: Thousand short tons of zinc per million 1977 dollars. 
NOTE.— Numbers in parentheses represent respective t-statistic. 



*U.S. GOVERNMENT PRINTING OFFICE: 1986-166-415/50943 



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